HPC, AI chips to drive rebound of Taiwanese wafer foundry industry in Q2-2025

The Taiwanese wafer foundry industry is expected to experience a rebound in the second quarter of 2025, driven by strong demand for AI and HPC chips, as well as a recovery in smartphone application processor (AP) shipments. However, the industry also faces challenges, including potential impacts from US-China trade tensions and competition from Chinese foundries in mature process technologies. 

Key trends

Growth in advanced nodes: Demand for AI and HPC chips, which utilize advanced process nodes like 3nm and 2nm, is a major growth driver. 

Rebound in consumer electronics: The consumer electronics sector, including smartphones and PCs, is expected to contribute to the rebound, with inventory replenishment and new product launches driving demand. 

Mature node pressure: Chinese foundries are increasing their capacity in mature process technologies, putting pressure on Taiwanese foundries to lower prices and maintain competitiveness. 

Geopolitical risks: US-China trade tensions and potential tariff uncertainties continue to be a concern for the industry, potentially impacting investment and strategic decisions. 

Advanced packaging: Advanced packaging technologies like CoWoS are becoming increasingly important, and TSMC is investing heavily in this area to maintain its competitive edge. 

TSMC's leadership: TSMC, the dominant player in the Taiwanese foundry market, is expected to further solidify its leadership position with the ramp-up of 2nm technology, and its continued investments in advanced nodes and packaging.