Semiconductor Foundry Market Set for Expansion as Industry Players Ramp Up Production Capacity

The Global Semiconductor Foundry Market was valued at USD 77.60 billion in 2023 and is projected to reach USD 139.64 billion by 2031, growing at a CAGR of 7.81% during the forecast period. The demand for semiconductor manufacturing is rising due to the rapid expansion of AI, 5G, IoT, and automotive electronics.

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Key Market Growth Drivers

1. Surging Demand for Advanced Chips

   • The increasing adoption of AI-driven processors, high-performance computing (HPC), and 5G infrastructure is driving demand for advanced semiconductor nodes (7nm and below).

2. Growth in Consumer Electronics & Automotive Industry

   • The expansion of smartphones, wearables, electric vehicles (EVs), and autonomous vehicles is fueling demand for efficient semiconductor chips.

3. Rise of Pure-Play Foundries

   • Major semiconductor companies are outsourcing chip production to pure-play foundries such as TSMC, GlobalFoundries, and UMC, boosting market growth.

4. Government Investments & Supply Chain Resilience

   • The U.S. CHIPS Act, European Chips Act, and China’s semiconductor self-sufficiency efforts are driving investments in local semiconductor manufacturing.

Market Segmentation

By Technology Node:

• 7nm and below – Used in AI, HPC, and flagship smartphones.

• 10nm-20nm – Applied in gaming consoles, advanced computing.

• 20nm-45nm – Dominates automotive and industrial applications.

• 45nm and above – Used in legacy nodes, IoT, and power management chips.

By Foundry Type:

• Pure Play Foundry – Contract manufacturers such as TSMC, UMC, and GlobalFoundries.

• IDMs (Integrated Device Manufacturers) – Companies like Intel, Samsung, and Texas Instruments, which design and manufacture chips in-house.

By Application:

• Telecommunication – Chips for 5G infrastructure, data centers, and cloud computing.

• Automotive – Increasing demand for ADAS, infotainment, and EV power electronics.

• Consumer Electronics – Used in smartphones, tablets, wearables, and IoT devices.

• Others – Includes medical devices, aerospace, and industrial automation.

Regional Insights

• Asia-Pacific – Dominates the market with leading foundries in Taiwan (TSMC), South Korea (Samsung), and China (SMIC).

• North America – Growing investments in U.S. semiconductor manufacturing (Intel, GlobalFoundries, TSMC Arizona).

• Europe – Strong focus on automotive chip production and EU semiconductor strategy.

• Rest of the World – Emerging foundries in India, the Middle East, and Latin America.

Future Trends & Challenges

Opportunities:

• Expansion of AI, HPC, and quantum computing chips.

• Growing investments in domestic semiconductor manufacturing.

Challenges:

• Supply chain disruptions and geopolitical tensions.

• High capital investment requirements for EUV lithography and advanced node production.

The Semiconductor Foundry Market is poised for strong growth, driven by technological advancements, increasing chip demand, and global efforts to localize semiconductor production.