AI-driven expansion reshapes global semiconductor growth

December 8, 2025 /SemiMedia/ — The global semiconductor sector is expected to enter a renewed expansion cycle as demand for AI computing continues to rise, according to new projections from IDC. The firm estimates that the worldwide foundry market will grow by around 20% in 2026, fueled primarily by TSMC’s dominance in advanced manufacturing nodes. TSMC’s revenue is forecast to increase by 22% to 26%, lifting its foundry market share to about 73%.

IDC expects the broader semiconductor market to expand 11% in 2026 to reach nearly USD 890 billion, with the industry on track to challenge the USD 1 trillion threshold by 2028. Compute-related semiconductors remain the largest and fastest-growing category, driven by AI deployment across data centers and edge applications. Growth in AI accelerators and ASICs is projected to significantly outpace GPUs.

Advanced and mature nodes show diverging momentum

Beyond advanced nodes, mature process technologies are also recovering after two years of adjustment. IDC notes that demand for high-speed interconnects, silicon photonics, and high-efficiency power management ICs will help keep mature-node utilization above 80% in 2026. In mainland China, utilization is expected to exceed 90% as policies continue to prioritize domestic substitution and capacity expansion.

China’s rising capacity and policy-driven shift

With U.S. export controls limiting access to leading-edge technologies, China is accelerating investments in mature nodes and expanding local equipment ecosystems to secure supply for automotive electronics, power devices, and communication ICs. IDC forecasts that China’s foundry capacity will surpass Taiwan’s by 2028, becoming the largest worldwide.

In IC design, IDC projects that mainland China will overtake Taiwan in 2025 to become the biggest design market in the Asia-Pacific region. The APAC IC design sector is expected to grow around 11% in 2026, with China’s share rising to roughly 45%.

Advanced packaging capacity strained by AI processors

Advanced packaging is also set for robust expansion as demand for AI processors remains elevated. IDC expects the global OSAT market to grow about 11% in 2026. CoWoS capacity is projected to rise by 72%, and TSMC’s annual output could reach more than 1.1 million wafers—yet supply is still likely to trail demand from customers such as NVIDIA and AMD.