Foundry 2.0 Market Revenue to Hit $320 Billion in 2025 with 16% Growth, Counterpoint Reports

The semiconductor industry has officially entered the Foundry 2.0 era, characterized by the deep integration of manufacturing, packaging, and testing, leading to profitable growth driven by the global artificial intelligence boom. According to the latest Foundry Market Supply Tracker report from Counterpoint Research, the global Foundry 2.0 market is projected to generate $320 billion in revenue for 2025, representing a 16% year-over-year increase. This double-digit growth is primarily fueled by steady demand for AI GPUs and AI-specific application-specific integrated circuits (ASICs) in advanced process manufacturing and advanced packaging sectors. Pure-play foundries, led by Taiwan Semiconductor Manufacturing, are spearheading the AI-driven expansion, while major Outsourced Semiconductor Assembly and Test (OSAT) providers are benefiting from spillover orders.

In 2025, the revenue growth within the pure-play foundry segment of the Foundry 2.0 market is being driven by Taiwan Semiconductor Manufacturing, Semiconductor Manufacturing International Corporation, and Nexchip Semiconductor Corporation. Taiwan Semiconductor Manufacturing remains the core pillar of the Foundry 2.0 landscape, even though its year-over-year growth rate in the fourth quarter of 2025 is expected to slow to 25% from over 40% earlier in the year. This deceleration aligns with market expectations, considering the high base in High-Performance Computing (HPC) and typical seasonal fluctuations in consumer electronics demand. For the full year, the company's revenue is still projected to achieve a robust 36% year-over-year increase.

Commenting on Taiwan Semiconductor Manufacturing's performance and the 2026 outlook, Counterpoint Senior Analyst Jake Lai emphasized, "More importantly, the market's focus on TSMC is shifting. The core question is no longer just wafer capacity, but system-level integration. As front-end process scaling faces increasing limitations, the bottleneck is shifting to the back-end. In this context, advanced packaging—particularly CoWoS—is becoming a key differentiator and is expected to be a core variable driving TSMC's performance in 2026."

Overall, non-TSMC pure-play foundries are expected to achieve a modest 8% year-over-year growth in 2025, with key players including Samsung, United Microelectronics Corporation (UMC), Vanguard International Semiconductor (VIS), Semiconductor Manufacturing International Corporation, Nexchip Semiconductor Corporation, and GlobalFoundries. Samsung's full-year performance has been mixed, but its 2026 results are anticipated to enter a growth trajectory as some significant potential customers seek supply chain diversification.

Discussing Samsung's performance and prospects, Research Director Tom Kang noted, "Demand for its 4nm process remains relatively stable, supporting better pricing levels. The production ramp-up of its 2nm process will help it secure higher-value chip design orders, particularly in AI and mobile segments. Combined, improvements in both shipment volume and Average Selling Price (ASP) indicate that Samsung is poised for growth in 2026."

Among other manufacturers, Chinese foundries such as Semiconductor Manufacturing International Corporation (up 16% YoY) and Nexchip Semiconductor Corporation (up 24% YoY) have shown outstanding performance, with growth supported by ongoing domestic substitution policies. This trend is unlikely to change in the short term, with double-digit growth expected to continue into 2026.

Non-memory Integrated Device Manufacturers (IDMs) like Texas Instruments and Infineon are experiencing a rebound as the overall semiconductor cycle gradually stabilizes. Non-memory IDMs have largely moved past the most severe inventory adjustment phase and returned to growth in the second half of 2025. For instance, Texas Instruments is projected to achieve a double-digit rebound (up 13% YoY) in 2025, while Infineon is expected to grow 5% year-over-year. This recovery will provide a more solid foundation for industry growth in 2026.

Benefiting from Taiwan Semiconductor Manufacturing and ASE/SPIL, advanced packaging technologies ranging from CoWoS to 2.5D/3D are driving sustained momentum in the OSAT sector. In 2025, the OSAT segment's revenue is projected to grow 10% year-over-year, highlighting the continued strength in advanced packaging. As Taiwan Semiconductor Manufacturing's internal capacity remains tight, providers like ASE/SPIL and Amkor are continuously receiving spillover orders, predominantly for AI-related applications.

Looking ahead, CoWoS-S and CoWoS-L will remain central to the advanced packaging technology roadmap. Affected by TSMC's ongoing capacity constraints, AI clients are actively securing additional capacity by establishing long-term partnerships with OSAT providers. Consequently, global advanced packaging industry capacity is expected to expand by approximately 80% year-over-year in 2026. Unlike previous cycles, this growth phase is more directly tied to the system-level demands of AI platforms (e.g., server CPUs, GPUs, and custom ASICs), which will provide OSAT players with a more sustainable growth path.

Commenting on the AI-driven advanced packaging trend, Counterpoint Senior Analyst William Li stated, "Advanced packaging is no longer just a supporting step in chip manufacturing; it is becoming a critical constraint for AI deployment at scale. As customers lock in capacity, the structural advantages for OSAT providers will far exceed those in previous cycles, with growth visibility extending for many years."

What is Foundry 2.0? The traditional definition of Foundry 1.0, which focused solely on chip manufacturing, is no longer sufficient to reflect the current industry dynamics. Counterpoint's Foundry 2.0 framework expands the scope to include pure-play foundries, non-memory IDMs, OSAT companies, and photomask suppliers. The transition to Foundry 2.0 reflects the industry's shift from a traditional pure-play model towards a more highly integrated ecosystem. In practical terms, this means closer collaboration between design, manufacturing, and packaging stages, ultimately enhancing system-level efficiency and optimizing Total Cost of Ownership (TCO).