Key Takeaways:
Taiwan Semiconductor Manufacturing Co. lifted its share of global contract chipmaking to an all-time high of 72.5% in the second quarter, extending a lead so wide that the rest of the industry now competes for scraps of a market it effectively prices.
The Hsinchu-based company booked about $40.20 billion in foundry revenue for the April-June period, up 12.1% from the prior quarter, according to a TrendForce Corp. report published Wednesday. Its share edged up from 72.3% in the first quarter. Combined sales across the world's 10 largest foundries reached a record $53.49 billion, up 11.5% from a year earlier, and those 10 companies captured 96.5% of the total.
"Strong demand for AI server GPUs and custom XPUs kept 3-, 4- and 5-nanometer process lines running at full capacity," TrendForce said in the report, adding that initial inventory build for new iPhones supported the quarter and that the 2-nanometer node contributed revenue for the first time, lifting both wafer shipments and average selling prices.
The concentration is the story. TSMC's nearest rival, Samsung Electronics Co., grew revenue just 1.8% to $3.26 billion and watched its share fall to 5.9% from 6.5%. The gap between first and second place widened to 66.6 percentage points from 65.8 points a quarter earlier. China's Semiconductor Manufacturing International Corp. took third with 5.4%, up from 5.1%, after revenue jumped 20% to about $3.01 billion — the fastest growth among the top three and enough to leave it just half a percentage point behind Samsung.
Samsung's advanced-process orders, including HBM base dies, and higher pricing for 5/4nm work were not enough to keep pace. SMIC shipped 2.9 million 8-inch-equivalent wafers, up 14% quarter over quarter, with utilization at 93.7% and average selling prices up 5.7%. The Shanghai-based foundry invested roughly $3.4 billion in the first half of 2026 and guided third-quarter revenue 2% to 4% higher.
Below the top three, the field is fragmented and small. Taiwan's United Microelectronics Corp. held fourth with $2.18 billion and 3.9% share, up 12.7% quarter over quarter, helped by 8-inch utilization recovery and server FPGA demand. U.S.-based GlobalFoundries Inc. ranked fifth at $1.79 billion and 3.2%, up 9.3%. China's HuaHong Group followed at $1.27 billion and 2.3%, then Israel's Tower Semiconductor Ltd. at $460 million, Taiwan's Vanguard International Semiconductor Corp. at $451 million, China's Nexchip Semiconductor Corp. at $447 million and Taiwan's Powerchip Semiconductor Manufacturing Corp. at $432 million — each holding 0.8% of the market.
For the companies buying wafers, the arithmetic is uncomfortable. Nvidia Corp. and Apple Inc., TSMC's two largest customers, have no comparable alternative for leading-edge volume. Samsung is still building out its 2nm lineup and advanced packaging, and Intel Corp.'s foundry unit has yet to win a marquee external AI accelerator customer at scale. That leaves pricing power in one set of hands. TrendForce noted that mature-node capacity is also tightening as consumer chip designers hold wafer starts over concerns about availability and further price increases — a dynamic that has already pushed Samsung to raise prices on some advanced contract work.
TSMC's roadmap keeps the lead compounding. The company has unveiled its A13 process, targeting a 6% area reduction versus A14, while N2U, planned for 2028, aims for 3% to 4% higher performance or 8% to 10% lower power consumption than N2P. Expanding CoWoS advanced packaging capacity — the step that bonds logic dies to HBM stacks — is the other half of the AI strategy, and it remains the tightest link in the accelerator supply chain.
The investment read is straightforward. TSMC's share gains are arriving alongside rising ASPs, not discounting, which supports gross margin even as the company spends heavily on 2nm and packaging capacity. Equipment and materials suppliers tied to leading-edge tooling benefit from the same concentration. Samsung and SMIC face the opposite problem: they must fund capacity to close a gap that widened this quarter, and SMIC's 20% growth came off a base one-eighth the size of TSMC's.
TrendForce expects foundry revenue to keep climbing in the third quarter as flagship smartphone production ramps and next-generation AI and HPC platforms move into higher-volume manufacturing. The risk embedded in that forecast is that a single vendor's capacity, yield or pricing decision now sets the cost of AI compute for the entire industry — and the top 10's 96.5% share leaves little slack elsewhere.
This article is for informational purposes only and does not constitute investment advice.
