The global semiconductor manufacturing sector, the invisible engine powering the digital age, is undergoing a profound transformation marked by surging demand for artificial intelligence, intensifying competition among processor architectures, and a concerted effort to reshape intricate international supply chains.

While established players maintain significant footholds, the landscape is increasingly contested by nimble newcomers and influenced by governmental policies to bolster domestic production and mitigate geopolitical risks.

Recent figures show robust growth tempered by regional variations and strategic realignments across the value chain.

Rising RISC-V tide amidst Arm’s ubiquity

The fundamental architecture to design processors dictates manufacturing volumes and market share, and here, a compelling three-way contest is unfolding.

Arm-based chips dominate the mobile and embedded sectors, with annual shipments measured in the tens of billions.

This ubiquity in consumer electronics reflects Arm’s historical focus on power efficiency and its pervasive licensing model.

Meanwhile, the x86 architecture, long the mainstay of personal computers and servers, is represented primarily by Intel and AMD. It holds a significant share of the overall processor market, estimated at around 55%.

However, the x86 share is being eaten by Arm-based CPUs, which are now used by all Apple Mac computers, several laptops, and, increasingly, by bespoke silicon for cloud computing and AI servers at major data centers.

most notable shift in the architectural arena is the rapid ascent of RISC-V. While starting from a smaller base, RISC-V shipments reportedly surpassed 10 billion units (often cores or simple controllers) in 2022.

Projections indicate a remarkable growth trajectory, with RISC-V System-on-Chip (SoC) shipments potentially reaching 16.2 billion units annually by 2030.

This growth is fueled by RISC-V’s open-standard nature, offering unprecedented flexibility and customization without royalty fees.

While its overall global processor market share is still smaller than x86 and Arm, one analysis focusing on the “Computer Microchips Market,” valued at $27.7 billion in 2024, placed RISC-V’s share at a notable 13.2%. This discrepancy highlights the impact of market definition, suggesting RISC-V is gaining significant traction in specific segments, potentially including lower-cost microcontrollers and specialized embedded processors. TSMC’s reign challenged by reshoring imperatives

The manufacturing of these diverse chip architectures is mainly the responsibility of specialized foundries, with TSMC holding a commanding lead.

In the fourth quarter of 2024, TSMC reportedly captured approximately 67% of the global foundry market revenue, underscoring its critical role in the semiconductor supply chain. Samsung Foundry occupies the second position with around 11%, while GlobalFoundries, UMC, and SMIC each account for roughly 5% of the market share. Recently, TSMC reported a 42% increase in its Q1 2025 revenue to $25 billion.

This concentration, particularly TSMC’s dominance in leading-edge logic manufacturing, has become a focal geopolitical concern. TSMC’s manufacturing prowess spans a comprehensive portfolio of process nodes, from mature technologies to the cutting-edge 3nm process. A transition to 2nm Gate-All-Around FET (GAA FET) (nanosheet) transistors is on the horizon. The company is also a leader in advanced packaging solutions like CoWoS, crucial for integrating high-performance computing and AI chips with high bandwidth memory. Recognizing the geopolitical risks associated with its heavy concentration in Taiwan, TSMC strategically diversifies its geographic footprint with significant investments in the United States, Japan, and future European expansion.

Intel, traditionally an Integrated Device Manufacturer (IDM), has embarked on a strategic pivot with the expansion of Intel Foundry Services (IFS), aiming to compete directly with TSMC and Samsung.

A key differentiator for IFS is its explicit commitment to supporting chip designs based on all three leading ISAs: x86, Arm, and RISC-V. Intel has even launched a $1 billion IFS Innovation Fund, with a significant portion dedicated to fostering the RISC-V ecosystem, recognizing the growing demand for this open architecture from potential foundry customers.

Intel’s support signifies a crucial acknowledgment of RISC-V’s increasing importance in the semiconductor landscape.

AI and automotive fueling foundry innovation

The demands of different market segments are significantly shaping foundry priorities. The insatiable appetite for computational power in High-Performance Computing (HPC) and Artificial Intelligence (AI) drives the demand for the most advanced process nodes and sophisticated packaging technologies offered by TSMC, Samsung, and, increasingly, IFS. Nvidia’s Blackwell GPUs, for instance, utilize TSMC’s advanced CoWoS-L packaging.

The automotive semiconductor market presents a different set of challenges and opportunities due to its stringent reliability requirements (AEC-Q100) and long-term supply needs.

Foundries like TSMC, Samsung, GlobalFoundries, and UMC have dedicated automotive platforms with certified processes, catering to the increasing demand for advanced chips in ADAS and infotainment systems, as well as mature nodes for microcontrollers and power management ICs. RISC-V is also gaining traction in the automotive sector, projected as a fast-growing application area.

Supply chain resilience

The highly concentrated nature of the semiconductor supply chain, particularly Taiwan’s and South Korea’s dominance in leading-edge manufacturing, has raised significant concerns about geopolitical risks. Dependencies on critical equipment, such as ASML’s EUV lithography machines, and globally sourced raw materials add further vulnerabilities.

In response, governments worldwide are implementing ambitious industrial policy initiatives. The US CHIPS and Science Act allocated billions of dollars to incentivize domestic semiconductor manufacturing and R&D to bring leading-edge logic production back to the United States.

the European Chips Act seeks to strengthen Europe’s semiconductor value chain and increase its global market share. These efforts are spurring significant investments from major chipmakers and foundries in regions beyond East Asia, signaling a long-term push for greater supply chain resilience and geographic diversification.

Sector in transition

The semiconductor manufacturing industry stands at a pivotal juncture. The relentless march of technological innovation, particularly in AI, creates unprecedented demand for cutting-edge silicon. The established dominance of x86 and Arm is facing a credible challenge from the open and customizable RISC-V architecture.

Meanwhile, while heavily reliant on TSMC, the foundry landscape is witnessing strategic shifts as Samsung and Intel aggressively pursue leading-edge capabilities, and geographic diversification becomes a critical imperative driven by geopolitical realities.

By: DocMemory
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