Taiwan’s foundry industry would see its global market share dip to 44 percent in 2026 as the US, China and other countries race to build local capacity to boost chip resilience amid escalating geopolitical risks, TrendForce Corp (集邦科技) said yesterday.
At present, Taiwan’s major foundry services providers together command 47 percent of the global market, statistics provided by TrendForce showed.
“Governments around the world are offering subsidies or tax incentives to encourage construction of local chip capacity, with the aim of minimizing risks of being overly dependent on Taiwan or Asia for chip supply amid rising geopolitical risks,” TrendForce analyst Joanne Chiao (喬安) told a forum organized by the research house in Taipei.
Photo: Ann Wang, Reuters
“The US and Japan are concentrating mostly on expanding advanced semiconductor capacity at home,” she said.
As a result, Taiwan’s foundry industry would see a bigger market share decline of 14 percentage points to 66 percent in 2026 from 80 percent now in the advanced chips area, that is, 7-nanometer, 5-nanometer or 3-nanometer chips, the researcher said.
“Despite the market share loss, Taiwan will continue to play a critical part in the world’s semiconductor supply chain as the world’s most advanced chips will still be made in Taiwan,” Chiao said.
Taiwan Semiconductor Manufacturing Co (台積電) expects to ramp up production of 2-nanometer chips in 2025 at its factories in Hsinchu and Taichung.
The chipmaker’s Arizona plant is to start making 4-nanometer chips by the end of next year.
The US would see its market share jump to 12 percent in 2026, from a very minimal share, in the advanced chips segment, the statistics showed.
China would see little progress, accounting for only 1 percent of the global market, as major Chinese chipmakers Semiconductor Manufacturing International Corp (中芯國際) and Hua Hong Semiconductor Ltd (華虹半導體) are unable to access key equipment for technology upgrades due to export restrictions from the US and Japan, TrendForce said.
The US and Japan have banned companies from exporting advanced semiconductor equipment and technology used in making 16-nanometer and more advanced chips to China.
The Netherlands might soon follow suit, Chiao said.
“Photolithography equipment is the choke point for China in expanding to advanced semiconductor technologies,” Chiao said. “The export restrictions will hold back China’s progress significantly.”
ASML Holding NV of the Netherlands is the world’s only supplier of photolithography equipment, or extreme ultraviolet lithography tools used in 3-nanometer technology, TrendForce said.
Japan’s Nikon Precision Industry Inc and Canon Inc supply photolithography equipment used in 28-nanometer technology.
Shanghai Micro Electronics Equipment Group (上海微電子), China’s sole semiconductor lithography specialist, can only supply equipment used in less advanced 90-nanometer technology at best, TrendForce said.
Overall, China’s market share is expected to rise to as high as 26 percent in 2026 from 24 percent this year, as it provides significant subsidies for domestic semiconductor capacity expansions in a bid to achieve its ambitious goal of achieving 70 percent chip self-sufficiency by 2025, it said.
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