TSMC dominates semiconductor foundry market with 35% market share, leaves Intel in its dust

TSMC holds a dominant 35.3% market share of the semiconductor market, revealed in a new report from Counterpoint Research, far ahead of any semiconductor rivals like Intel and Samsung that have been tripping over themselves of late.

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TSMC is out and ahead in the number on integrated semiconductor contract manufacturing (foundry) market, which includes both packaging and testing. Analysts at Counterpoint Research pointed out that TSMC holds 35.3% of the foundry market, while Samsung Electronics has fallen down and into 4th place with just 5.9% of the market.

Intel has been throwing billions of dollars into acquiring ASML's bleeding-edge High-NA EUV lithography machines -- and has been slipping for years. Contracting TSMC to make most of its high-end chips, it sits in second place with 6.5% but has ASE on its heels with 6.2% of the semiconductor market.

Integrated foundry is a concept that encompasses not only pure-play foundry businesses, but also IDMs (Outsourced Semiconductor Assembly and Test), and photomask manufacturing suppliers. It's also characterized by its ability to assess end-to-end supply chain capabilities, not just simple semiconductor contract manufacturing. The industry also refers to this as "Foundry 2.0".

In its Q3 2024 earnings presentation, TSMC announced that including packaging and testing in the foundry market would more than double the market size, and that the Taiwanese giant is also planning to continuously expand its advanced packaging capabilities and production capacity. TSMC added that it would also be increasing its 2.5D packaging (CoWoS) production capacity by over 4x between 2023 and 2026.

Counterpoint Research added that TSMC's market share has gradually risen from 29.4% in early 2024 to over 35%, and that the integrated foundry market grew from 13% during the same period, but TSMC significantly outpaced this average, growing by 35.3%. This shows that in the competitive foundry industry, not just front-end processes that engrave circuits on wafers, but also integrated packaging and testing capabilities have become more and more important.

Analysts at Counterpoint also report that highly integrated semiconductor technologies like AI, chiplets, and High Bandwidth Memory (HBM) spread, the structure is changing at breakneck speeds that are seeing packaging and testing technology, as well as production capacity are directly linked when it comes to semiconductor performance.

Brady Wang, a research analyst at Counterpoint Research said: "Samsung Electronics and Intel are chasing the leading company, TSMC. Samsung Electronics has been facing yield issues since the development of its 3-nanometer (nm) Gate-All-Around (GAA) process".