What are the potential implications?

📌 context: The semiconductor industry is experiencing a major growth phase, largely fueled by advancements and adoption of AI technologies.

What are the potential implications?

💡 impact1: Increased investment and expansion in advanced chip manufacturing and packaging technologies are necessary to meet future demand.

TSMC Forecasts $1.5 Trillion Chip Market by 2030

Key Takeaways✦ Atlas AI

Global chip market to hit $1.5 trillion by 2030.

AI and HPC to drive 55% of market growth.

TSMC expanding global manufacturing capacity.

Atlas AI

TSMC Raises Global Chip Market Forecast to $1.5 Trillion

Taiwan Semiconductor Manufacturing Company (TSMC) announced on May 14 that it anticipates the global semiconductor market will exceed $1.5 trillion by 2030, an increase from its previous forecast of $1 trillion. This revised projection, detailed in presentation materials ahead of a technology symposium, is primarily driven by the expanding influence of artificial intelligence (AI) and high-performance computing (HPC).

AI and HPC are expected to constitute 55% of the projected $1.5 trillion market by 2030. Smartphones are forecast to account for 20%, with automotive applications making up 10%. TSMC is expanding its manufacturing capacity, planning to construct nine phases of wafer fabs and advanced packaging facilities in 2026. The company projects an 11-fold increase in AI accelerator wafer demand from 2022 to 2026.

TSMC is also ramping up capacity for its advanced 2-nanometer and next-generation A16 chips, targeting a compound annual growth rate (CAGR) of 70% from 2026 to 2028. Furthermore, the CAGR for its advanced CoWoS (Chip on Wafer on Substrate) packaging capacity is forecast to exceed 80% from 2022 to 2027.

CoWoS is a critical technology for AI chips, including those designed by Nvidia. TSMC's global expansion includes ongoing fab construction in Arizona, Japan, and Germany, with the Arizona site expected to increase output 1.8-fold year-on-year by 2026.