How does chip market growth affect smartphone prices?

Smartphones are projected at only 20% of the market by 2030 versus 55% for AI and HPC. This means massive AI demand for DRAM and NAND keeps prices elevated — an effect already visible in 2026 smartphone price increases.

Is CoWoS relevant to everyday consumers?

CoWoS packaging technology bonds chips to HBM memory — fundamental for NVIDIA H100/H200 and AI chips in data centers. Everyday consumers benefit indirectly through faster and more capable AI applications.

What is the A16 technology TSMC mentioned?

A16 is TSMC's post-2nm manufacturing node — expected to combine FDSOI and Gate-All-Around advantages with smaller nanometers. Higher performance and better power efficiency with greater production scale by 2028.

Why did TSMC raise its forecast by such a large margin?

A 50% upgrade — from $1 trillion to $1.5 trillion — reflects the unexpectedly explosive growth in AI demand that surpassed all previous projections.

Will Taiwan remain the center of chip production?

Yes in the near term. But the massive expansion in Arizona, Japan, and Germany signals gradual geographic diversification — driven by national security concerns and geopolitical risks in the Taiwan Strait.

TSMC Raises Forecast — Global Chip Market to Reach $1.5 Trillion by 2030 Driven by AI: 55% of Market Goes to AI and HPC

TSMC Raises Its Ceiling by 50% — AI Redraws the Semiconductor Industry Map

TSMC, the world's largest contract chipmaker, raised its global chip market forecast by 50% — from $1 trillion to more than $1.5 trillion by 2030, driven by surging demand for artificial intelligence and high-performance computing.

Market Distribution — Who Takes the Biggest Share?

AI and high-performance computing are expected to account for 55% of the $1.5 trillion market, equivalent to roughly $825 billion, followed by smartphones at 20% and automotive applications at 10%.

The Mind-Boggling Numbers — AI Demand Grows 11-Fold

Demand for AI accelerator wafers alone is projected to increase 11-fold between 2022 and 2026.

Expansion Plans — Nine Phases in 2026 Alone

TSMC is accelerating capacity expansion. The company plans to build nine phases of wafer fabrication plants and advanced packaging facilities in 2026.

Projected Growth Rates: Capacity for its most advanced 2nm and next-generation A16 chips is projected to grow at a compound annual rate of 70% from 2026 to 2028. CoWoS capacity — a key packaging technology widely used in AI processors including those designed by Nvidia — is forecast to grow at a compound annual rate of more than 80% from 2022 to 2027.

Geographic Expansion — Beyond Taiwan

Arizona, USA: The first fab is already in production. Tool installation for the second fab is planned for the second half of 2026. Construction of the third fab is underway. Work on a fourth fab and the site's first advanced packaging facility is expected to begin this year. TSMC anticipates a 1.8-fold year-on-year increase in Arizona output by 2026, with yields comparable to those in Taiwan.

Japan: The first fab is in volume production for 22nm and 28nm products. Plans for the second fab have been upgraded to 3nm in response to strong demand.

Germany: The fab is currently under construction and progressing as scheduled. It plans to provide 28nm and 22nm technologies, followed by 16nm and 12nm technologies.