TSMC raises semiconductor market forecast to $1.5 trillion by 2030 as AI demand surges

TSMC now expects semiconductor market to exceed $1.5 trillion

TSMC forecasts that the global semiconductor market will exceed $1.5 trillion by 2030, up from a previous estimate of $1.0 trillion, according to Reuters. The company attributed this substantial increase to the rising demand for AI silicon, projecting that 55% of the market will arise from AI and high-performance computing, while smartphones will contribute 20% and automotive will account for 10%. Demand for AI accelerator wafers is expected to surge by 11 times in 2023 compared to 2022, indicating significant short-term growth in the sector. TSMC is responding to this demand by accelerating the construction of new production facilities beyond Taiwan. In the United States, TSMC's Arizona plant, aided by a $6.6 billion grant from the U.S. government, is already producing 4nm chips, with plans to transition to 3nm and 2nm production in the future. A second fab in Arizona is nearing completion and will receive advanced chip-making machinery later this year. Additionally, TSMC is currently constructing a third fab in Arizona, with plans for a fourth facility and an advanced packaging site as well. The Arizona operations are projected to see a 1.8-fold increase in year-on-year production, achieving yields comparable to the company's Taiwan fabs. TSMC also operates a fabrication plant in Japan that produces older 22nm and 28nm chips, primarily for automotive components and low-power applications. A second facility in Japan is planned to begin producing 3nm chips. Furthermore, TSMC is developing a plant in Germany, which will start with manufacturing 22nm and 28nm parts, with intentions to scale up to 16nm and 12nm capabilities at a later stage.

Taiwan Semiconductor Sees Global Chip Market Hitting $1.5 Trillion By 2030 Amid AI Boom - Taiwan Semicond

According to presentation materials released ahead of the company's technology symposium in Hsinchu on Thursday, as reported by Reuters, Taiwan Semiconductor projects the global semiconductor market is expected to surpass $1.5 trillion by 2030, up from the previous forecast of $1 trillion. AI Fuels Growth Most of the growth would come from booming demand for artificial intelligence and high-performance computing, which is expected to account for 55% of the total semiconductor market. This will be followed by 20% from smartphones and 10% from the automotive applications. The company also projects AI accelerator wafer demand will rise 11 times between 2022 and 2026. Capacity Expansion Plans The world's largest contract chipmaker outlined buildout plans to meet AI-driven needs in both manufacturing and packaging. The company said it accelerated capacity additions in 2025 and 2026 and intends to start nine new stages of wafer fabs and advanced packaging sites in 2026. The company's board has approved $31.28 billion in capital spending to expand advanced chip manufacturing capacity, construct new fabs and install facility systems to support rising demand for AI, 5G and high-performance computing chips. Taiwan Semiconductor expects to increase output for its 2-nanometer and next-generation A16 technologies at a 70% compound annual growth rate from 2026 through 2028. It also pegged capacity growth for its CoWoS (Chip on Wafer on Substrate) advanced packaging at more than 80% on a CAGR basis from 2022 to 2027. CoWoS is widely used in AI chips, including those designed by Nvidia Corp. (NASDAQ:NVDA). Global Footprint Expansion TSM has a substantial presence in global portfolios, with nearly every chip designer depending on the company's cutting-edge manufacturing nodes. It updated details on the U.S., Japan, and Germany manufacturing footprint in the report. In Arizona, the company's first plant is already in production and equipment installation for the second one is scheduled for the second half of 2026. The third plant is under construction. Work at the fourth plant is expected to begin this year, along with the site's first advanced packaging facility. Taiwan Semiconductor bought a second large plot in Arizona for future expansion. With all these developments, the chipmaker projects Arizona output will increase 1.8 times by this year. In Japan, the first plant is producing 22-nanometer and 28-nanometer products in volumes, while the second one has been upgraded to 3-nanometer due to strong demand. The German plant is under construction and is progressing as expected, with plans to offer 28-nanometer and 22-nanometer technologies, followed by 16-nanometer and 12-nanometer technologies. Benzinga Edge Stock Rankings indicate that TSM has a Momentum score in the 89th percentile with a strong price trend in the short, medium and long term. It also has a solid Growth score in the 93rd percentile. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor. Photo courtesy: Shutterstock Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

TSMC says global chip market to hit $1.5 trillion by 2030 as AI drives growth

HSINCHU, Taiwan, May 14 (Reuters) - TSMC, the world's largest contract chipmaker, expects the global semiconductor market to exceed $1.5 trillion by 2030, topping its previous forecast of $1 trillion, according to its presentation materials ahead of a tech symposium on Thursday. Here are the details: o AI and high-performance computing are expected to account for 55% of the $1.5 trillion market, followed by smartphones with 20%, and automotive applications with 10%, according to TSMC. o TSMC said it has been expanding capacity at a faster pace in 2025 and 2026 and plans to build nine phases of wafer fabs and advanced packaging facilities in 2026. o The chipmaker is projected to ramp up capacity for its most advanced 2-nanometer and next generation A16 chips, with a compounded annual growth rate (CAGR) of 70% from 2026 to 2028. o TSMC said CAGR of capacity for its advanced packaging CoWoS (Chip on Wafer on Substrate) is forecast at more than 80% from 2022 to 2027. CoWoS is a key chip packaging technology widely used in AI chips including those designed by Nvidia. o The company said AI accelerator wafer demand is projected to increase 11-fold from 2022 to 2026. TSMC'S GLOBAL FOOTPRINT o Arizona: The first fab is already in production. Tool move-in for the second fab is planned for the second half of 2026. Construction of a third fab is underway. Work on a fourth fab and the site's first advanced packaging facility is expected to begin this year. o TSMC anticipates a 1.8-fold year-on-year increase in Arizona output by 2026, with yields comparable to those in Taiwan. o The chipmaker said it completed the purchase of a second large parcel of land in Arizona for future expansion. o Japan: The first fab is currently in volume production for 22-nanometer and 28-nanometer products. Plans for the second fab have been upgraded to 3-nanometer in response to strong demand. o Germany: The fab is currently under construction and progressing as scheduled. It plans to provide 28-nanometer and 22-nanometer technologies, followed by 16-nanometer and 12-nanometer technologies. (Reporting by Wen-Yee Lee; Editing by Kate Mayberry)