TSMC Raises Chip Market Forecast to $1.5 Trillion by 2030

Taiwan Semiconductor Manufacturing Company (TSMC) has sharply raised its outlook for the global semiconductor market, now projecting it will surpass $1.5 trillion by 2030.

That figure, disclosed in presentation materials ahead of the company’s annual tech symposium Thursday, is 50% above its previous forecast of just over $1 trillion and represents roughly double what the industry is expected to generate this year.

The revision signals that demand from artificial intelligence is growing faster than the world’s largest contract chipmaker had anticipated even a few years ago.

How AI Reshapes the Market Breakdown by 2030

AI and high-performance computing are expected to account for 55% of the projected $1.5 trillion market. Smartphones would follow at 20%, with automotive applications at 10%.

At 55%, the AI and HPC segment alone would exceed the entire semiconductor market’s value in 2025, according to analysis from The Motley Fool.

That concentration matters for TSMC specifically. The company controls approximately 72% of the global pure foundry chip market, well ahead of Samsung’s 7%.

Its dominance in the segment where the most spending is heading gives it an outsized claim on the expected growth.

What TSMC’s Expansion Plans Look Like Through 2026

To meet the rising demand, TSMC said it has been expanding capacity at a faster pace in 2025 and 2026 and plans to build nine phases of wafer fabs and advanced packaging facilities in 2026.

Five 2-nanometer fabs are set to enter mass production in 2026, marking the most aggressive expansion in the company’s history. TSMC said the 2nm process has entered mass production and its yield learning curve is already superior to that of the 3nm generation.

The capacity growth rate for 2nm and next-generation A16 chips is projected at a compound annual rate of 70% from 2026 to 2028.

Advanced packaging capacity, specifically the CoWoS process used in AI servers, is forecast to grow at more than 80% annually from 2022 to 2027.

On the A16 node, the timeline has a nuance. Kevin Zhang, TSMC’s co-chief operating officer, said A16 will be ready for production in 2026, but that actual product volume ramp depends on customers and is expected to begin in 2027.

Q1 2026 Earnings That Back the Bullish Outlook

The forecast revision is grounded in results that already show the trend accelerating. TSMC reported Q1 2026 consolidated revenue of NT$1,134.10 billion, equal to $35.90 billion, with net income of NT$572.48 billion and diluted EPS of NT$22.08, or $3.49 per ADR unit.

Revenue rose 40.6% year over year in U.S. dollar terms. Net income climbed 58.3%.

Gross margin reached 66.2%, operating margin 58.1%, and net profit margin 50.5%. Advanced nodes at 7nm and below accounted for 74% of total wafer revenue.

For Q2 2026, TSMC guided revenue of $39.0 billion to $40.2 billion, implying about 10% sequential growth.

Full-year capital expenditure is expected near the high end of $52 billion to $56 billion.

Risks That Could Slow the Trajectory

Analysts note that TSMC’s near-term growth is concentrated among a small set of U.S. hyperscalers.

Intellectia AI noted that if those customers pull back spending due to weaker-than-expected AI returns or macro pressure, TSMC’s pricing power and factory utilization could be affected.

Supply constraints also persist. Even with higher production capacity, analysts expect a shortage of high-performance chips to continue given explosive demand, with Apple, Nvidia, Qualcomm, and AMD among those that have already secured large allocations of 2nm output.