Behind the Semiconductor Market’s Breakthrough of $1.5 Trillion: Capacity Shortages, Technological Race, and a Reshaping of the Foundry Landscape

The global semiconductor industry is undergoing an unprecedented structural transformation. According to the latest forecast released on June 2 by the World Semiconductor Trade Statistics (WSTS), the global semiconductor market is expected to reach US$1.511 trillion in 2026, nearly 90% higher than in 2025 and surpassing the US$1 trillion mark for the first time. This growth rate will far exceed the previous record of 42% set in 1995. Even more striking, WSTS had projected a market size of US$975.4 billion for 2026 in December 2025; just six months later, that estimate was sharply revised upward by 55%.

Memory Chips: The Super Engine Soaring by 249.5%

From a product‑category perspective, memory chips are the primary driver of this round of growth. According to WSTS forecasts, memory‑chip sales will surge by approximately 249.5% year over year by 2026, surpassing US$800 billion and exceeding the total size of the entire semiconductor market in 2025. Logic chips are expected to grow by 37.3%, reaching a market value of US$410 billion.

Amid this wave, competition in the high-bandwidth memory (HBM) segment is particularly fierce. On June 18, SK Hynix announced that it has delivered seventh‑generation HBM4E samples to key customers, featuring a 12‑layer stack that achieves 48 GB of capacity, with pin speeds up to 16 Gbps, more than 20% improved energy efficiency, and thermal resistance reduced by approximately 17%. Meanwhile, Samsung Electronics beat them to the punch on May 29, shipping 12‑layer HBM4E samples to its clients. According to data from TrendForce, by the end of 2025, 2026, and 2027, the combined HBM silicon‑wafer input of the three major HBM suppliers will account for 18%, 22%, and 30% of total DRAM wafer input, respectively, underscoring the growing squeeze HBM is exerting on overall DRAM capacity.

However, even though the three major manufacturers—Samsung, SK Hynix, and Micron—have allocated 70% of their new production capacity to HBM, a supply gap of 50% to 60% still remains. This supply-demand imbalance has already rippled through the end‑user market: Apple CEO Tim Cook recently stated that, driven by sharply rising memory‑chip costs, the company plans to raise its product prices.

A Dramatic Shift in the Contract Manufacturing Landscape: TSMC Faces Critical Capacity Shortages, While Samsung Achieves a “Structural Breakthrough”

The explosive growth in AI demand is reshaping the global advanced chip foundry landscape.

According to a June 17 report by Nikkei Asia, six sources familiar with the matter revealed that, as TSMC’s advanced‑node capacity remains severely constrained, securing production schedules for new customers and small‑volume orders has become increasingly difficult. As a result, global tech and automotive giants such as Google, AMD, and Tesla are accelerating their efforts to secure advanced‑node foundry services from Samsung Electronics.

Specifically, Google is in discussions with Samsung to produce the next-generation Axion processor and TPUs; AMD plans to shift some of its CPU orders to Samsung starting in 2028; and Tesla’s next‑generation AI6 chip will be manufactured exclusively at Samsung’s Texas facility. Meanwhile, NVIDIA’s strategic investments are also advancing: on June 16, local time, NVIDIA announced that its strategic partner Coherent broke ground on an expanded manufacturing facility in Sherman, Texas, focusing on 6-inch indium phosphide wafers and optical interconnect capacity.

This trend is seen by the industry as a pivotal turning point, signaling that the global advanced‑chip foundry landscape is shifting from TSMC’s near‑monopoly to greater diversification. According to TrendForce, the global wafer‑foundry market is expected to grow 24.8% year over year in 2026, reaching approximately US$218.8 billion. TSMC’s capacity for 5nm and 4nm nodes and below will remain fully booked through year‑end, and the company has already implemented across‑the-board price hikes for these process nodes in 2026.

The “Three Kingdoms Kill” of the 2-nanometer era

In the advanced-node arena, the battle over 2-nanometer technology among Intel, Samsung, and TSMC is entering a critical phase.

On June 16, local time, at the 2026 VLSI International Symposium, Intel announced that its advanced process node, Intel 18A‑P, has officially entered the risk production phase. This marks the first performance‑enhanced variant in the Intel 18A family; compared with the baseline 18A, 18A‑P delivers a 9% performance boost at the same power level or reduces power consumption by 18% at the same performance. For a company that has faced intense scrutiny over the past several years due to process‑node delays, this milestone carries significance far beyond a routine technology upgrade.

Meanwhile, TSMC’s monthly 3-nanometer capacity is expected to rise to 180,000 wafers by the end of 2026, while its 2-nanometer capacity is projected to approach 100,000 wafers per month. Samsung, leveraging its early adoption of GAA architecture in 3nm manufacturing, has brought its Exynos 2600 smartphone SoC built on the SF2 process to market. The three major manufacturers plan to fully commercialize their 2-nanometer processes in 2026, naming them Intel 18A, Samsung SF2, and TSMC N2, respectively.

Domestic Substitution: From Catching Up to Pioneering New Frontiers

China’s semiconductor industry has also achieved several significant breakthroughs in self-reliance and controllability.

On June 17, Suanmiao Technology, a company specializing in high-performance AI chips with 3D‑architectured cloud‑based computing, announced that its A4E 3D TokenPU chip—designed for large‑model inference—has officially entered tape‑out as of June 15. The chip employs a 3D hybrid stacking architecture, vertically stacking eight layers of memory wafers atop a compute‑logic wafer and leveraging through‑silicon vias and bump‑to‑bump interconnects to achieve micron‑scale connectivity, delivering an unprecedented memory bandwidth of 16 TB/s. “We’re not chasing others on established tracks; we’re blazing new trails,” said Wang Fuquan, founder of Suanmiao Technology.

In addition, on June 15, China National Nuclear Corporation announced that China has, for the first time, successfully achieved independent mass production of silicon‑28 isotopes with an enrichment level exceeding 99.99%, providing robust support for the indigenous development of core materials for silicon‑based quantum computing and for advanced‑node semiconductors, among other applications.

Policy Boost: The EU’s “Chip Act 2.0” Has Been Released

At the international policy level, in early June, the European Commission formally unveiled a comprehensive “European Technology Sovereignty Package,” officially incorporating the previously market‑anticipated Chips Act 2.0 into its overall legislative framework. The revised legislation places particular emphasis on strengthening provisions for the deployment of cutting‑edge technologies such as advanced process nodes, chiplet integration, and advanced packaging, while explicitly committing to coordinate resources to establish the region’s first integrated semiconductor fab that combines advanced‑node wafer fabrication, chiplet‑based heterogeneous integration, and 3D advanced packaging capabilities. According to the EU, by 2035, public‑private investment totaling €120 billion (approximately $140 billion) will be required to revitalize domestic chip production.

In China, the National Development and Reform Commission and other relevant departments have issued a notice on the preparation of a list of integrated circuit enterprises eligible for tax preferential policies in 2026, continuing to support industrial development through fiscal and tax measures.

Outlook

WSTS forecasts that the global semiconductor market will expand by an additional 26.6% in 2027, reaching US$1.914 trillion. Driven by surging demand for AI, structural capacity shortages, and diversifying technology roadmaps, the global semiconductor industry is entering an unprecedented period of rapid growth. Whether it’s the race to develop HBM, the competition over 2-nanometer processes, or the reshaping of the foundry landscape, these developments underscore that this trillion-dollar industry is undergoing a profound reconfiguration of value.