TSMC Leads Foundry 2.0 Surge as OSAT Demand Rises

According to a recent report by Counterpoint Research, the global “Foundry 2.0” market continued to expand last year, led by strong growth from TSMC. With TSMC’s capacity remaining tight, outsourced semiconductor assembly and test (OSAT) providers such as ASE Technology, Siliconware Precision Industries, and Amkor Technology have absorbed overflow demand—particularly from AI-related applications—and are expected to maintain growth momentum this year.

Unlike traditional wafer foundry models focused solely on fabrication, “Foundry 2.0” expands the ecosystem to include pure-play foundries, fabless-aligned integrated device manufacturers (IDMs), OSAT providers, and photomask suppliers. TSMC formally introduced the concept in 2024, redefining it to encompass logic IC manufacturing, advanced packaging, testing, and mask production.

Counterpoint estimates that the global Foundry 2.0 market reached approximately $320 billion in revenue in 2025, representing a 16% year-over-year increase. TSMC remained the primary growth driver, with its revenue in this segment rising 36% annually.

The report attributes this expansion largely to sustained demand for AI GPUs and AI ASICs, spanning both advanced process nodes and advanced packaging technologies. While pure-play foundries continue to benefit from AI-driven demand, OSAT companies are increasingly capturing additional orders as part of the broader supply chain.

Industry focus is also shifting from wafer capacity to system-level integration. As scaling advanced nodes becomes more challenging, the importance of backend processes is rising. Advanced packaging technologies—particularly CoWoS—are emerging as key differentiators in semiconductor competitiveness.

Technologies such as CoWoS-S and CoWoS-L remain central to this trend, with advanced packaging capacity projected to grow by around 80% in 2026. As customers secure capacity in advance, visibility for OSAT providers continues to improve, reinforcing their role in AI deployment.

Beyond TSMC, other foundries collectively recorded an 8% revenue increase in 2025, including Samsung Electronics, UMC, Vanguard International Semiconductor, SMIC, Nexchip, and GlobalFoundries. Samsung’s performance remained relatively stable in 2025, but is expected to improve in 2026 as customers diversify supply chains.

The report also highlights stable demand for Samsung’s 4nm process, while its upcoming 2nm node is expected to enhance product mix and average selling prices. Meanwhile, Chinese foundries showed notable growth, with SMIC reporting a 16% increase and Nexchip achieving 24% growth, supported by localization policies that are expected to sustain momentum in the near term.