Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker, has raised its long-term outlook for the global semiconductor industry, projecting the market will surpass $1.5 trillion by 2030, according to presentation materials released ahead of its technology symposium on Thursday. The revised forecast marks a sharp increase from the company’s earlier estimate of $1 trillion, highlighting the accelerating impact of artificial intelligence and high-performance computing on global chip demand.
TSMC expects artificial intelligence and high-performance computing applications to contribute 55% of the projected semiconductor market by the end of the decade. Smartphones are expected to account for 20% of the market, while automotive applications are projected to make up 10%.
The company indicated that it is significantly expanding manufacturing capacity through 2025 and 2026 to meet rising demand. TSMC plans to build nine phases of wafer fabrication plants and advanced packaging facilities in 2026 as part of its aggressive expansion strategy.
TSMC also expects rapid growth in production capacity for its most advanced chips, including 2-nanometer and next-generation A16 technologies. The company projected a compound annual growth rate of 70% for these advanced nodes between 2026 and 2028.
Demand for advanced packaging technologies is also expected to surge. Reuters reported that TSMC forecasts capacity for its CoWoS (Chip-on-Wafer-on-Substrate) packaging technology to grow at a compounded annual rate of more than 80% between 2022 and 2027. CoWoS has become a critical technology for AI processors, including chips designed by Nvidia.
The company further projected that wafer demand for AI accelerators would rise eleven-fold between 2022 and 2026, underscoring the explosive growth of AI-related semiconductor requirements globally.
TSMC also outlined updates on its international manufacturing expansion. In Arizona, the company said its first fabrication plant is already in production, while tool installation for a second facility is scheduled for the second half of 2026. Construction of a third fab is ongoing, and work on a fourth fab, along with the site’s first advanced packaging facility, is expected to begin later this year.
Reuters reported that TSMC anticipates Arizona output to increase 1.8 times year-on-year by 2026, with production yields matching those achieved in Taiwan. The company also confirmed it has completed the purchase of a second large parcel of land in Arizona for future expansion.
In Japan, TSMC’s first fab has entered volume production for 22-nanometer and 28-nanometer chips. The company has upgraded plans for its second Japanese fab to support 3-nanometer production in response to strong customer demand.
Meanwhile, in Germany, TSMC said construction of its manufacturing facility is progressing on schedule. The fab is expected to initially support 28-nanometer and 22-nanometer technologies before later expanding to 16-nanometer and 12-nanometer production capabilities.
