Explosive demand for artificial intelligence (AI) semiconductors drove the global pure-play foundry market to 29% year-over-year growth in the second quarter of this year. TSMC maintained its overwhelming lead with a 73% market share, while South Korea’s Samsung Electronics remained at 7%, widening the gap between the two companies to 66 percentage points.

According to market research firm Counterpoint Research on the 28th, a surge in AI-related orders combined with production capacity reallocation across foundry players has sustained supply-demand imbalances in both advanced and mature process nodes. This was identified as the key factor driving second-quarter market growth.

TSMC’s dominance has become further entrenched. The company recorded a 73% share in Q2, holding steady from Q1. Its share has climbed steadily from 68% in Q1 of last year to 71% in Q2, 72% in both Q3 and Q4, and now 73% this year.

The research firm attributed TSMC’s continued leadership to the ramp-up of its 2-nanometer process and expansion of its 3nm process. Tight supply in 8-inch and 12-inch mature nodes, as well as advanced packaging capacity, also supported its share gains.

Samsung Electronics held second place with a 7% share in Q2, showing little change from the previous quarter. The company’s share has hovered at 7% since Q3 of last year, after posting 9% in Q1 and 8% in Q2 of 2024. The gap with TSMC now stands at 66 percentage points.

Samsung is currently focused on improving yields for its SF2 2-nanometer process. Analysts note that demand for its SF4 and SF5 processes, along with foundry wafer price increases implemented in the first half of this year, are serving as key revenue growth drivers.

China’s SMIC took third place with a 5% share, unchanged from the previous quarter. SMIC posted record quarterly revenue in Q2, lifted by solid domestic Chinese demand coupled with an influx of overseas orders.

UMC and GlobalFoundries recorded 4% and 3% respectively. Other players combined for a 7% share. All top five players maintained identical share levels to the previous quarter.

The pure-play foundry market share breakdown is as follows:

CompanyQ2 ShareQoQ ChangeTSMC73%No changeSamsung Electronics7%No changeSMIC5%No changeUMC4%No changeGlobalFoundries3%No changeOthers7%No change

Note: Based on Counterpoint Research data. Pure-play foundry market only.

The second-half outlook remains bright. Counterpoint Research expects wafer average selling prices (ASP) to continue climbing and utilization rates at pure-play foundries to remain at relatively high levels. AI semiconductor demand is expected to drive market growth for the foreseeable future.

The data underscores that demand for AI accelerators and high-performance computing chips has become firmly established as the growth engine of the foundry market. In particular, with supply-demand imbalances persisting in advanced nodes, TSMC’s trend of further expanding its share on the back of technology leadership is becoming increasingly pronounced.