Taiwan’s chipmakers are heading for a record-breaking run. Forecasts indicate the island’s semiconductor foundry revenue will top US$130 billion in 2025, leaping more than 30% year over year. Two forces are driving the surge: relentless demand for advanced manufacturing processes tied to AI, and proactive inventory stocking across the supply chain as companies hedge against policy uncertainty in the United States.
The momentum does not stop there. In 2026, revenue is expected to grow by more than 10% on top of 2025’s high base, setting a new all-time high. As cloud providers and enterprises expand their AI computing capacity, demand for AI accelerators and custom AI ASICs should remain robust, keeping advanced nodes running hot.
Why it’s happening:
– AI is scaling fast, and that favors cutting-edge process technologies where Taiwan’s foundries excel.
– Supply chain players are building preventive inventories to avoid being caught short by shifting US policies, creating a near-term pull-forward in orders.
– Cloud data centers are racing to deploy more AI compute, sustaining high chip demand through 2026.
What could slow the climb:
– Geopolitical risks remain the wild card. The US–China trade conflict and potential tariff changes can reshape procurement strategies, alter cost structures, and interrupt momentum if they escalate.
What to watch next:
– The pace of AI workload growth at hyperscale data centers.
– Any policy shifts that affect chip export controls, tariffs, or cross-border supply chains.
– Signs of inventory normalization after the current wave of preventive stocking.
Bottom line: Taiwan’s foundry industry is on track for a standout 2025 with revenue surpassing US$130 billion, followed by double-digit growth in 2026. AI-led demand for advanced processes, combined with strategic inventory builds, is setting new records—though geopolitical uncertainty remains a key variable to monitor.
