TSMC leads global foundry market, gains on AI demand

Taiwan Semiconductor Manufacturing Co (TSMC) held its position as the leading global wafer foundry in the first quarter of 2025, achieving a 67.6% market share, according to a report by TrendForce.

TSMC reported sales of US$25.52 billion from January to March.

This marks a 5% decline from the previous quarter.

However, its market share increased from 67.1%, driven by demand for AI and high-performance computing (HPC) devices, along with urgent orders related to televisions.

🔗 Source: Taipei Times

🧠 Food for thought

1️⃣ TSMC’s extraordinary market concentration has few parallels in any critical industry

TSMC’s 67.6% market share represents one of the most extreme cases of market concentration in any critical technology sector globally.

The 59.9 percentage point gap between TSMC and Samsung is particularly striking when compared to other tech markets. For context, no single smartphone vendor holds more than 25% of the global market 1.

This dominance is reflected in TSMC’s exceptional financial performance, with the company maintaining profit margins around 41.69% and return on equity of 31.64% 2.

TSMC’s market power has developed alongside exponential revenue growth, from approximately $20 billion in 2010 to projections of around $50 billion by 2025, representing a compound annual growth rate of nearly 15% 3.

The concentration of advanced semiconductor production in a single company presents both opportunities for efficiency and potential vulnerabilities in the global technology supply chain, particularly as semiconductors become increasingly critical to economic and national security.

2️⃣ China’s semiconductor subsidies are reshaping competitive dynamics at mature nodes

The rise of SMIC and other Chinese foundries highlighted in the article directly correlates with China’s strategic semiconductor subsidies, which reached approximately 12.1 billion yuan ($1.75 billion) distributed to around 190 semiconductor companies 4.

Huawei alone received 7.3 billion yuan in subsidies in 2023, up from 6.5 billion yuan in 2022 and 2.6 billion yuan in 2021, demonstrating the accelerating pace of government support 5.

These subsidies are particularly focused on mature semiconductor nodes (28nm and above), where Chinese companies like SMIC have made the most significant competitive gains, as reflected in SMIC’s 1.8% quarterly revenue increase and market share growth to 6% 6.