Semiconductors
Global semiconductor revenue is on track for $720 billion in 2026, the highest on record, driven by AI accelerator demand. TSMC alone holds 61% of the foundry market. Leading-edge production (3nm and below) is concentrated almost entirely in Taiwan and South Korea, with the US, EU and Japan racing to build alternative capacity.
Key insights
Taiwan is the bottleneck the industry cares about
TSMC produces over 90% of leading-edge logic chips (5nm and below). Samsung Foundry sits at 8% market share with weaker yields at 3nm. Intel Foundry Services is targeting 2nm production in 2025–26 to re-enter merchant foundry. The geographic concentration is the proximate driver of CHIPS Act-style industrial policy in the US, EU, Japan and India.
AI is reshaping the demand mix
Nvidia data-center GPU revenue passed $90B in fiscal 2025 with the H100, H200 and B100/B200 family. HBM (high-bandwidth memory, made by SK hynix, Samsung and Micron) is the secondary AI bottleneck — supply is sold out into 2026. AI accelerator + HBM together now exceed 35% of global wafer-equivalent demand at leading-edge nodes.
Capex reshored, but at high cost
TSMC Arizona (Fab 21), Samsung Texas (Taylor), Intel Ohio (New Albany), Rapidus Hokkaido and TSMC Dresden are the marquee new builds. Cost overruns are routine — TSMC Arizona Phase 1 came in roughly 25% above budget. EUV tooling (ASML) and skilled labour are the binding inputs. None of these fabs replicates Taiwan-scale ecosystems before the early 2030s at earliest.
Global semiconductor revenue 2014–2026
USD billions, WSTS aggregate
Key Finding: Revenue grew from $336B (2014) to $720B (2026), with a brief decline in 2023 during the memory glut and a sharp 2024–25 rebound led by AI.
Foundry market share (Q4 2025)
% of total pure-play foundry revenue
Key Finding: TSMC's 61% share is roughly twice the rest of the pure-play foundry industry combined.
Methodology & caveats
Logic, memory, analog
The semiconductor industry splits into logic (processors, GPUs, ASICs — TSMC, Samsung, Intel), memory (DRAM and NAND — Samsung, SK hynix, Micron) and analog/discrete/sensors (TI, Analog Devices, Infineon, STMicro). Headline revenue mixes all three; node-leadership debates are almost entirely about logic.
Node names are marketing
Process node names ('5nm', '3nm') no longer correspond to any physical feature size. TSMC N3, Samsung 3GAE and Intel 18A use different transistor architectures (FinFET, gate-all-around) and density metrics. Compare on transistor density (MTr/mm²) and SRAM scaling, not the marketing label.
Industrial policy in motion
The US CHIPS Act provides $52.7B in manufacturing grants and a 25% investment tax credit. The EU Chips Act mobilizes €43B. Japan has committed roughly $26B to TSMC, Rapidus and others. South Korea, Taiwan and China have substantially larger programmes by GDP share. Implementation lags announcement; first commercial output from the new US/EU fabs is broadly 2025–28.