TSMC raises chip-market forecast to $1.5 trillion as 2nm and A16 capacity set to grow 70% a year

TSMC used its 2026 Technology Forum in Hsinchu on Thursday to lift its forecast for the global semiconductor market by 50 per cent, telling customers and analysts that it now expects the industry to exceed $1.5 trillion in annual sales by 2030. The world's largest contract chipmaker had previously been guiding to roughly $1 trillion on the same horizon.

AI and high-performance computing will account for 55 per cent of that market, the company said — equivalent to roughly $825 billion — followed by smartphones at 20 per cent and automotive applications at 10 per cent. The breakdown is the most explicit statement to date of how thoroughly AI workloads are reshaping the chipmaker's revenue base.

Capacity at TSMC's most advanced nodes — the 2-nanometre process and the next-generation A16 node — will grow at a compound annual rate of 70 per cent from 2026 through 2028, the company said. Capacity for CoWoS advanced packaging, which is critical to Nvidia's GPU lineup and increasingly to AMD and Broadcom designs, will grow at a CAGR above 80 per cent from 2022 through 2027.

Building out that capacity requires what TSMC senior vice-president Kevin Zhang described as "nine phases of wafer fabrication plants and advanced packaging facilities this year alone," spread across Hsinchu, Kaohsiung, Arizona, Kumamoto and Dresden. Arizona's Phase 3 fab is now expected to start production in the second half of 2027.

Nvidia chief Jensen Huang, who is in Beijing this week, used a video appearance at the forum to confirm that Nvidia's next-generation Rubin platform will be produced exclusively on TSMC's N2 and A16 processes. Huang said Nvidia's 2027 product roadmap was "fully gated to TSMC capacity" — a statement that turned a routine technical update into a market-moving line, with Nvidia shares rising 2.2 per cent in New York.

TSMC also reaffirmed its Q1 2026 earnings guidance and said the impact of the Strait of Hormuz disruption on chip-related shipments has so far been "fully manageable" through routing changes and inventory buffers.