The global wafer foundry industry will grow by a compound annual growth rate (CAGR) of 11.5% from 2024 to 2029, reaching US$270 billion, driven by AI and high-performance computing (HPC) applications that will gear up demand for advanced processes and advanced packaging making them the primary growth driver for the sector, according to DIGITIMES Research's latest report forecasting the global wafer foundry industry performance until 2029.
On the other hand, starting in 2024, foundry houses will gradually introduce new advanced and mature process capacities to meet medium- to long-term customer demands. However, geopolitical risks will remain an uncertain factor affecting the industry's development over the next five years, prompting related companies to redefine the scope of their foundry businesses and adopt multi-location production strategies.
In 2024, although the semiconductor industry is gradually recovering from the adverse impacts of inventory adjustments on customers, weak consumer demand has weighed on mature processes, making foundry houses rely on AI/HPC applications as the year's growth driver. In line with Intel's plan to release a descriptive financial report for its foundry business, DIGITIMES Research estimates that global wafer foundry revenue for 2024 will reach US$159.1 billion, growing 14% year-on-year, the report's figures show.
Looking ahead to the next five years, AI/HPC applications will continue to play a critical role in driving the foundry industry development. Along with expanding advanced manufacturing and packaging capacities, the global wafer foundry market is expected to surpass US$270 billion by 2029.
According to DIGITIMES Research, with AI/HPC applications relying heavily on advanced manufacturing technologies, TSMC, Samsung Electronics, and Intel will advance their processes to the 1.4nm node. However, the competition among these three major companies will depend on Intel's production status with its 18A process and Samsung's investment and deployment strategies in the foundry business. Additionally, advanced packaging technologies such as 2.5D/3D and Co-Packaged Optics (CPO), which are crucial for AI/HPC development, will be critical areas where these three companies will strengthen their competitive edge.
Geopolitics will remain a key factor shaping the wafer foundry industry over the next five years, driven by the US-China tech rivalry and semiconductor control measures from the US and its allies. In response to these risks, TSMC has introduced its 'Foundry 2.0' strategy to redefine the industry's scope, while more foundries are investing in multiple locations to mitigate geopolitical challenges.
