Semiconductor industry has officially entered the "Foundry 2.0" era, characterized by deep integration of manufacturing, packaging, and testing, achieving higher-quality growth driven by the global AI boom. According to Counterpoint Research's latest report on foundry revenue, yield, and capacity utilization by node, the global Foundry 2.0 market revenue grew 17% year-over-year (YoY) in Q3 2025, reaching $84.8 billion. This double-digit growth was primarily fueled by sustained demand for AI GPUs in both front-end wafer fabrication and back-end advanced packaging.
The traditional "Foundry 1.0" model, which focused solely on chip manufacturing, no longer fully reflects current industry dynamics. Counterpoint introduced the "Foundry 2.0" concept, incorporating pure-play foundries, non-memory IDMs, OSAT providers, and photomask suppliers into a unified analytical framework.
Neil Shah, Vice President of Research at Counterpoint Research, stated: "Companies are evolving from single links in the manufacturing chain into technology integration platforms. This transformation ensures tighter vertical collaboration, faster innovation cycles, and deeper value creation—key elements for system-level optimization in the AI era."
Key highlights from Q3 2025:
- **Taiwan Semiconductor Manufacturing (TSM) Leads**: Among pure-play foundries, TSM continued to dominate the market with a 41% YoY revenue increase. Growth was driven by Apple’s flagship smartphone 3nm chip ramp-up and strong demand for 4/5nm processes from AI accelerator clients like NVIDIA, AMD, and Broadcom. However, tight 4/5nm capacity remains a bottleneck for further Q4 revenue growth. TSM’s robust advanced packaging capabilities are expected to sustain revenue momentum into 2026.
- **Slower Growth for Non-TSM Foundries**: Non-TSM foundries collectively posted 6% YoY growth in Q3 2025, down from 11% in Q2 2025.
- **Non-Memory IDMs Recover**: Non-memory IDMs returned to growth with a 4% YoY increase, signaling the nearing end of inventory correction. Texas Instruments led with 14% YoY growth, while STMicroelectronics showed signs of stabilizing declines.
- **OSAT Industry Thrives**: OSAT sector revenue grew 10% YoY in Q3 2025 (vs. 5% in Q4 2024). ASE and SPIL were key contributors, benefiting from spillover orders for FOCoS (fan-out chip-on-substrate) packaging solutions amid TSM’s AI GPU and AI ASIC demand. Counterpoint forecasts a 100% YoY surge in advanced packaging capacity by 2026, making AI GPUs and ASICs the primary growth drivers for OSAT firms in 2025–2026.
Looking ahead, Senior Analyst Jake Lai noted: "With key revenue drivers nearing capacity limits (4/5nm nodes at full utilization) and CoWoS supply remaining constrained, TSM—the core growth driver of the foundry market—is unlikely to see significant sequential growth in Q4. We expect full-year 2025 Foundry 2.0 revenue growth at around 15%, with pure-play foundries projected to grow 26% YoY, sustained by ongoing AI GPU/ASIC shipments."
On advanced packaging trends, Senior Analyst William Li added: "NVIDIA and Broadcom dominate the AI GPU/ASIC market, and their demand fluctuations significantly impact overall CoWoS needs. In 2026, TSM will prioritize NVIDIA’s AI GPU platforms (Blackwell and Rubin), creating strategic opportunities for OSAT players. Broadcom and others must seek partners beyond TSM to secure CoWoS-S supply, with spillover demand fueling ASE and SPIL’s expansion—particularly for AMD’s Venice and NVIDIA’s Vera platforms in 2026."