● International Development
1. By 2026, the total global demand for CoWoS wafers will reach 1 million pieces, with Nvidia monopolizing 60%
According to the latest research report released by Morgan Stanley, it is predicted that the total global demand for CoWoS wafers will only be 370000 wafers in 2024, but it will grow to 670000 wafers in 2025 and climb to 1 million wafers in 2026, with an annual growth rate of 40% to 50%. Among them, TSMC's position in the supply chain is becoming increasingly crucial. It is expected that by the end of 2026, its monthly production capacity will increase from 32000 pieces in 2024 to 93000 pieces, with an annual output of over 1.1 million pieces. It is estimated that AI related revenue will account for 25% of TSMC's total revenue by 2025.
Amazon Web Services (AWS) has also ordered 50000 CoWoS wafers through its partner Alchip, and Marvel has also ordered 55000 CoWoS wafers for customized chips designed by AWS and Microsoft; MediaTek has reserved a production capacity of 20000 pieces of CoWoS for the Google TPU project.
2. The global wafer foundry market is expected to reach $165 billion by 2025, a year-on-year increase of 17%
According to the latest quarterly wafer foundry market report released by market research firm Counterpoint, benefiting from strong growth in demand for AI and high-performance computing (HPC) chips, global pure wafer foundry industry revenue is expected to increase by 17% year-on-year to $165 billion in 2025, with a compound annual growth rate (CAGR) of 12% between 2021 and 2025.
The report points out that advanced processes of 7nm and below will become the main growth driver of the wafer foundry market, and the proportion of revenue in the wafer foundry industry is expected to exceed 56% by 2025. Among them, the revenue growth rate of 3nm nodes is impressive, expected to increase by more than 600% compared to 2024, and the revenue will reach about 30 billion US dollars. The 5/4nm process will also maintain high demand, with an estimated contribution of over $40 billion. The overall growth momentum comes from the trend of upgrading AI smartphones, accelerating the popularity of AI PCs equipped with NPUs, and expanding demand for applications such as AI ASICs, GPUs, and HPC.
Counterpoint Research believes that 2nm will become one of the most strategically valuable and long-lived node processes in the next five years, due to the strong demand growth for AI and computing applications extending from the cloud to edge devices. In terms of other processes, the revenue of the 20-12nm process in the wafer foundry market is expected to remain stable in 2025, contributing an estimated 7% of the revenue. This is mainly due to the fact that some mature process applications are shifting towards more advanced nodes. Compared to the 54% revenue share of mature processes (28nm and above) in 2021, it is expected to decrease to 36% in 2025, indicating that some mature processes are gradually being replaced. However, the 28nm process is expected to continue growing at a compound annual growth rate of 5%.
Overall, the global pure wafer foundry industry will continue to demonstrate steady growth in 2025, with advanced processes remaining a key driving force for market and technological evolution. TSMC maintains a leading position in advanced processes, while Samsung and Intel are actively expanding their presence. UMC, GlobalFoundries, and SMIC maintain stable performance in mature processes. In addition to innovative breakthroughs in technologies such as High NA EUV in the front-end process, the back-end packaging has also shown diversified progress, such as HBM integration and Chiplet chip design, creating more opportunities for revenue growth.
3. SEMI: Global semiconductor manufacturing equipment sales will reach $125.5 billion this year
According to the latest forecast data from the Semiconductor Industry Institute (SEMI), global semiconductor manufacturing equipment sales are expected to increase by 7.4% year-on-year to $125.5 billion in 2025, setting a new historical high. Driven by advanced logic, storage, and technological transformation, semiconductor manufacturing equipment sales are expected to further increase to $138.1 billion by 2026.
SEMI pointed out that following last year's record breaking sales of $104.3 billion, wafer fab equipment (WFE), including wafer processes, wafer fab facilities, and mask equipment, is expected to increase by 6.2% year-on-year to $110.8 billion in 2025, driven by growth in wafer foundry and storage application sales, higher than the estimated $107.6 billion level at the end of 2024.
With the expansion of production capacity for cutting-edge logic and memory supporting artificial intelligence applications, as well as the ongoing process technology migration in major niche markets, SEMI estimates that wafer fab equipment sales are expected to increase by another 10.2% to $122.1 billion in 2026.
With the significant increase in chip architecture complexity and strong demand for AI performance and high bandwidth memory (HBM), semiconductor back-end testing equipment is expected to grow by 23.2% year-on-year (25.4% growth rate in 2024) to $9.3 billion in 2025, and packaging equipment sales are expected to increase by 7.7% year-on-year to $5.4 billion. In 2026, sales of testing equipment and packaging equipment will increase by 5% and 15% respectively.
Driven by strong demand for advanced nodes, it is expected that WFE sales for wafer foundry and logic applications will steadily increase by 6.7% year-on-year in 2025, reaching $64.8 billion. By 2026, this niche market is expected to grow by another 6.6%, reaching $69 billion. With the large-scale manufacturing of 2nm all roundgate (GAA) nodes in the industry, the increase in capacity expansion procurement, and the growing demand for leading technologies, this growth will be supported.
It is expected that capital expenditures related to storage will increase in 2025 and continue to grow in 2026. NAND device sales continue to recover from the significant contraction in 2023. After a slight increase of 4.1% in 2024, driven by 3D NAND stacking and capacity expansion, the NAND device market is expected to grow by 42.5% to $13.7 billion in 2025 and by 9.7% to $15 billion in 2026. At the same time, DRAM device sales surged 40.2% to $19.5 billion in 2024, and are expected to grow 6.4% and 12.1% respectively in 2025 and 2026 to support investments in HBM and artificial intelligence deployment.
4. Japan's semiconductor equipment sales are expected to exceed 5 trillion yen by 2026
The latest report released by the Semiconductor Manufacturing Equipment Association of Japan (SEAJ) shows that the sales revenue of semiconductor equipment manufactured in Japan for the year 2025 (April 2025 March 2026) will be revised up to 4863.4 billion yen, setting a new historical high. It is estimated that the sales revenue in 2026 will break through the 500 trillion yen mark, rewriting the historical high.
The report points out that the sales revenue in 2024 increased by 29.0% year-on-year to 4768.1 billion yen, breaking through the 4 trillion yen mark for the first time in history and setting a new historical high. Due to the strong demand for GPUs and HBMs for AI servers, Taiwan, China's advanced wafer foundry (TSMC) will start mass production of 2nm, and the investment in 2nm will increase. With the increase in South Korea's investment in DRAM/HBM, it is estimated that the sales of semiconductor equipment manufactured in Japan (referring to the sales of Japanese enterprises' domestic and overseas equipment in Japan) in 2025 will be revised up to 4863.4 billion yen from the previous estimate (January 2025), which will increase by 2.0% compared with 2024. The annual sales will hit a record high for the second consecutive year.
For the forecast of 2027 (April 2027 March 2028), SEAJ pointed out that due to the fact that in addition to the demand for AI servers, products equipped with edge AI are expected to account for nearly half of the global market in the smartphone/PC field. It is estimated that Japan's semiconductor equipment sales will increase by 3.0% year-on-year to 5510.3 billion yen, and annual sales are expected to reach a historical high for the fourth consecutive year. The estimated compound annual growth rate (CAGR) for Japan's chip equipment sales during the 2025-2027 fiscal year is 4.9%. The global market share of Japanese chip equipment (in terms of sales) has reached 30%, ranking second only to the United States in the world.
5. By 2030, the semiconductor value of data center servers will reach $500 billion
Artificial intelligence (AI) is strongly driving the growth of semiconductor value within data center servers, and it is expected that this value will reach approximately $500 billion by 2030. The increase in server semiconductor content is mainly due to the surge in demand for more silicon chips for storage, processing, and interconnection, which is largely driven by AI, machine learning (ML), and Frontier Models.
The number of servers using AI is growing rapidly, from only a few percentage points of all computing servers in 2020 to over 10% in 2024. This growth follows an S-shaped curve pattern: initial growth is slow, followed by a rapid climb, expected to stabilize after 2026 and continue until 2030. The data center semiconductor accelerator market is expected to begin scaling up in 2024 and is estimated to reach $493 billion by 2030. At that time, data center semiconductors are expected to account for over 50% of the entire semiconductor market, reflecting a significant shift in the market landscape driven by the demand for AI, cloud computing, and ultra large scale infrastructure. The compound annual growth rate (CAGR) of this segmented market (2025-2030) is almost twice that of the entire semiconductor industry.
In terms of composition, logic semiconductors will continue to dominate, and due to the increasing complexity and processing demands of AI intensive workloads, their growth is the fastest. Memory, especially high bandwidth memory (HBM), is the second largest niche market and is experiencing rapid growth to meet the high throughput demands of AI and high-performance computing (HPC). The expansion of photonics and co packaged optics (CPO), driven by companies such as Nvidia and Broadcom, is also changing server architectures. In the field of photonics alone, it is expected that revenue will reach billions of dollars by 2030.
It is expected that by 2030, the number of semiconductor wafers used for servers will exceed 20 million, most of which will be manufactured at nodes below 28 nanometers to meet the demand for advanced AI chips.
6. The development of new mines cannot keep up with the surge in demand for AI, making it difficult to fill the copper gap
By 2035, approximately 32% of global semiconductor production may be affected by copper supply disruptions related to climate change, which is four times the current level. Chile, the world's largest copper producer, is already dealing with water scarcity, which is causing a slowdown in copper production. According to a PwC report, by 2035, most of the 17 countries supplying copper materials to the chip industry will face drought risks; If material innovation cannot adapt to climate change and affected countries are unable to develop safer water sources, the risks will intensify over time. It is predicted that the risk of copper supply interruption may affect all major chip manufacturing regions worldwide.
According to the International Energy Agency's (IEA) basic forecast, global data center electricity demand will grow at a compound annual growth rate of 15% by 2026. JPMorgan estimates that by 2030, this growth rate will require a cumulative increase of approximately 2.6 million tons of copper demand, and the copper supply gap will reach 4 million tons. The report states that the growth of pure electric vehicles and renewable energy, coupled with limited supply of new copper mines, is the reason they predict a copper shortage.
The rapid rise of artificial intelligence computing has driven a rapid increase in copper demand. With the strong promotion of generative AI technologies such as ChatGPT and cutting-edge formats such as metaverse, the application of artificial intelligence worldwide continues to expand. China Telecom predicts that the global AI market will grow at a compound annual growth rate of 58% to approximately $400 billion over the five-year period from 2022 to 2027. The emergence of new demands such as large model training and inference has also put forward a greater demand for computing power. IDC data shows that by 2027, the size of China's computing power market is expected to reach 1234.7 EFLOPS, with intelligent computing power accounting for over 90%. The trend of low-power technology may pose a challenge to the growth of copper demand. Driven by the "dual carbon" goal, reducing the energy consumption of AI computing chips has become an important development direction in the integrated circuit industry. It is worth noting that copper accounts for up to 75% of the usage in data center power distribution systems. If AI energy efficiency technology continues to break through, it may lead to variable demand growth for copper in computing infrastructure.
● Domestic dynamics
1. In the first half of the year, China's integrated circuit exports amounted to 650.26 billion yuan, a year-on-year increase of 20.3%
According to the General Administration of Customs of China, in the first half of 2025, China's exports of mechanical and electrical products will reach 7.8 trillion yuan, an increase of 9.5%. Among them, automatic data processing equipment and its components amounted to 702.79 billion yuan, an increase of 3.0%; The export quantity of integrated circuits increased by 20.6% to 167.77 billion, and the export value increased by 20.3% to 650.26 billion yuan; Automobiles amounted to 428.72 billion yuan, an increase of 9.4%; Mobile phones amounted to 357.35 billion yuan, a decrease of 7.4%. In the first half of 2025, China's import of mechanical and electrical products reached 3.4 trillion yuan, an increase of 6.3%. Among them, the number of integrated circuits increased by 8.9% to 281.88 billion, and the value increased by 8.3% to 1.38 trillion yuan; The number of cars decreased by 32.4% to 224000, and the value decreased by 37.1% to 83.18 billion yuan.
Previous data shows that by 2024, China has become one of the world's largest integrated circuit markets, and the current domestic integrated circuit production is showing a steady growth trend. The output of integrated circuit products in 2024 is 451.4 billion blocks, a year-on-year increase of 22.2%; The production of solar cells and industrial robots increased by 15.7% and 14.2% respectively year-on-year, leading the overall industrial growth rate.
From a regional perspective, the proportion of China's integrated circuit exports to Southeast Asian countries is increasing, rising from 15% in 2020 to 31% in 2024. This may reflect the current situation of industrial chain transfer, with some downstream links of the manufacturing industry shifting to Southeast Asian countries, while upstream integrated circuit and other industrial chains are gradually shifting to China. At the same time, the transfer of downstream manufacturing industries has also avoided some tariff barriers to exports to Europe and America, and the ultimate consumers are still in the European and American markets.
IC design is the most critical link in the chip value chain in the semiconductor industry, and the revenue situation of this link is also worth paying attention to. According to data previously released by the Ministry of Industry and Information Technology, the revenue of China's integrated circuit design industry will reach 364.4 billion yuan in 2024, a year-on-year increase of 16.4%. As a comparison, the revenue of integrated circuit design in China reached 306.9 billion yuan in 2023, a year-on-year increase of 6.4%, indicating that the growth rate of the domestic integrated circuit design industry will accelerate in 2024.
2. Electronic information manufacturing industry in the first half of 2025: 11.1% growth rate leading, resilience highlighted
In the first half of the year, the added value of electronic information manufacturing industry above designated size increased by 11.1% year-on-year, with growth rates 4.7 and 1.6 percentage points higher than those of industrial and high-tech manufacturing industries during the same period, respectively. In June, the added value of electronic information manufacturing industry above designated size increased by 11% year-on-year. Among the main products, the production of mobile phones was 707 million units, a year-on-year decrease of 4.5%. Among them, the production of smartphones was 563 million units, a year-on-year increase of 0.5%; The output of microcomputer equipment was 166 million units, a year-on-year increase of 5.6%; The production of integrated circuits reached 239.5 billion blocks, a year-on-year increase of 8.7%.
In the first half of the year, the electronic information manufacturing industry above designated size achieved a year-on-year increase of 3.6% in export delivery value, an increase of 0.3 percentage points from January to May. In June, the electronic information manufacturing industry above designated size achieved a year-on-year increase of 5% in export delivery value. According to customs statistics, in the first half of the year, China exported 66.75 million laptops, a year-on-year decrease of 2.8%; 340 million mobile phones were exported, a year-on-year decrease of 7%; Exported 167.8 billion integrated circuits, a year-on-year increase of 20.6%.
In the first half of the year, the electronic information manufacturing industry above designated size achieved a revenue of 8.04 trillion yuan, a year-on-year increase of 9.4%; The operating cost was 7.02 trillion yuan, a year-on-year increase of 9.6%; Achieve a total profit of 302.4 billion yuan, a year-on-year increase of 3.5%; The operating revenue profit margin was 3.76%, an increase of 0.4 percentage points from January to May. In June, the operating revenue of the electronic information manufacturing industry above designated size was 1.55 trillion yuan, a year-on-year increase of 9.6%.
3. H20 Export“ Loosening” The breakthrough moment for domestic GPUs
On July 15th, Nvidia announced the resumption of supply for the Huawei H20 computing chip. Nvidia stated that the US government has assured Nvidia that the license has been granted and the company hopes to begin delivery as soon as possible. Subsequently, AMD also plans to restart exporting MI308 chips to China.
After experiencing the impact of supply disruptions, some domestic enterprises have formed a dual supply chain strategy of "maintaining stability in core scenarios (using Nvidia) and ensuring independence in security scenarios (using domestic products)". For example, top cloud service providers and other enterprises simultaneously focus on imported and domestic chips, essentially incorporating the two types of products into different demand pools: Nvidia ensures the continuity of high-end computing power, while domestic chips solidify the security of basic computing power. The demand for "dual track" has brought a continuous growth channel to domestic GPUs.
According to TrendForce consulting data, there are three types of AI server chip manufacturers in the domestic market: one is purchased from external sources such as Nvidia and AMD, another is self-developed ASIC (Application Specific Integrated Circuit) by cloud vendors, and a third is domestic suppliers. The market share of the outsourced portion was about 63% last year, and is expected to decrease to 41.5% by 2025. With the support of state-owned AI chip policies, domestic chip suppliers in China are expected to increase their share to 40% by 2025, almost on par with the proportion of purchased chips.
4. Shi Huikang, Deputy Director of the Electronic Information Department of the Ministry of Industry and Information Technology: We hope that the development of RISC-V in China will be realized through these three aspects点
According to statistics, in 2024, China contributed more than half of the shipment volume of RISC-V chips, achieving very good breakthroughs in high-performance computing, artificial intelligence, servers, automotive electronics, and other fields. From China's perspective, RISC-V provides excellent development opportunities for the industry.
In March of this year, the report on the draft of the 2025 National Economic and Social Development Plan emphasized the need to continuously cultivate and strengthen emerging industries, promote breakthroughs in emerging fields such as open source instruction set architecture, seize the opportunity of RISC-V open source, concentrate efforts, gather consensus, overcome the drawbacks of dispersed open source technology and ecological differentiation, and embark on a path of innovative development in China.
Shi Huikang put forward three hopes for the development of RISC-V in China:
One is to deepen collaboration and jointly build a prosperous ecology. Under the guidance of the Electronic Department of the Ministry of Industry and Information Technology, we established the RISC-V Working Committee for the industry in August 2023. Since then, we have attracted more than 80 member units to join, effectively consolidating the core strength of domestic industry university research and application. We have made positive progress in standard promotion, common technology research, ecological construction, and other aspects. We hope that industry insiders can continue to make good use of this working platform, form a joint force in key links such as core instruction set expansion, basic toolchain, operating system, etc., internally serve as a service platform, and externally convey the voice of China, jointly creating an internationally competitive RISC-V ecological highland.
The second is to accelerate conversion and drive large-scale applications. The value of technology is ultimately tested by the market, and we need to vigorously bridge the last mile from laboratory innovation to large-scale application. On the one hand, we should continue to consolidate and expand the leading advantages and market penetration of RISC-V in the Internet of Things, industrial control, edge computing and other related fields. On the other hand, we should make every effort to promote the large-scale commercial implementation of RISC-V in high-performance computing, data center servers, artificial intelligence accelerators, intelligent connected vehicles and other high-value fields, so as to truly make RISC-V a powerful engine of scientific and technological innovation in China.
The third is to firmly open up and lead global cooperation. To integrate and enrich the RISC-V global ecosystem with a more proactive attitude, we encourage and support Chinese enterprises, research institutions, and open source communities to deeply participate in the relevant work of the RISC-V International Foundation, and contribute Chinese wisdom and solutions on global issues such as basic standards, security regulations, and interconnectivity. While adhering to independent innovation, we will strengthen open cooperation with top international peers in basic research and cutting-edge technology exploration, attract global innovation resources to gather in China, and become an active builder and key contributor to the global RISC-V ecosystem.
5. In 2023, Chinese Mainland will become the world's largest wafer foundry center
Yole data shows that by 2030, Chinese Mainland will surpass Taiwan, China (23%) with 30% of the global wafer foundry capacity, becoming the world's largest foundry center. This forecast is based on the current capacity base of 21% in Chinese Mainland in 2024 and the expansion rate of 4-5 new wafer fabs every year. Local enterprises such as SMIC and Huahong will lead the expansion, and 70% of the newly added production capacity will be used for nodes of 28nm and above, focusing on fields such as automotive electronics and industrial control.
According to the "2024 Global Exclusive Wafer Foundry Ranking" released by Chip Insights, the overall revenue of 31 exclusive wafer foundry companies worldwide reached 915.4 billion yuan in 2024, a year-on-year increase of 23%. The total revenue of the top ten companies was 876.6 billion yuan, a year-on-year increase of 24%, and the overall market share increased by 0.73%. According to the location of the headquarters, there are four wafer foundry companies from the Chinese Mainland, namely, SMIC International, Huahong Group, Jinghe Integration, and Xinlian Integration. The overall market share of these four companies in 2024 is 10.87%. There are also four companies in Taiwan, China of China, namely TSMC, Uni Power, Li Power and World Advanced. The overall market share of these four companies is 78.52%
6. Shanghai Pudong: Focus on chip storage packaging and other aspects
According to the official website of the CPC Municipal Government, the seventh plenary meeting of the 12th Shanghai Municipal Committee of the Communist Party of China was held on July 7.
The plenary session pointed out the need to strengthen the construction of national strategic scientific and technological capabilities, deepen high-risk and high-value basic research, and enhance the cultivation of cutting-edge and disruptive technologies. Take on heavy responsibilities and overcome difficulties in accelerating breakthroughs in key core technologies. Accelerate the growth of the three leading industries of integrated circuits, biomedicine, and artificial intelligence, strengthen scientific and technological research in key areas, promote state-owned enterprises to create original technology source areas, encourage private enterprises to innovate and open up, and support foreign-funded research and development centers to enhance their capabilities.
Wu Jincheng, a member of the Municipal Party Committee, Deputy Secretary General of the Municipal Government, Deputy Secretary of the Pudong New Area Party Committee, and District Mayor, stated that Pudong needs to accelerate breakthroughs in core technologies and implement them in areas such as chip storage and packaging.
7. Shenzhen introduces 10 regulations on integrated circuits
The "Several Measures for Promoting High Quality Development of Semiconductor and Integrated Circuit Industry in Shenzhen" (hereinafter referred to as the "Several Measures") have been introduced and implemented, and a total scale of 5 billion yuan "Saimi Industry Private Equity Fund" has been established to support the optimization and quality improvement of the entire industry chain through a combination of "policy+capital".
The "Several Measures" focus on the core goals of "strengthening the chain, stabilizing the chain, and supplementing the chain", and propose 10 specific support measures from the aspects of breakthroughs in high-end chip products, strengthening chip design and chip support, accelerating the promotion and application of EDA tools, breakthroughs in core equipment and supporting components, breakthroughs in key manufacturing packaging materials, improving the level of high-end packaging and testing, and accelerating the maturity of compound semiconductors.
The relevant person in charge of the Shenzhen Development and Reform Commission introduced that the fund will mainly invest in key semiconductor and integrated circuit projects, segmented leading enterprises, and projects that play a significant role in improving the industrial chain in Shenzhen, focusing on building a localized industrial chain supply chain that is "independent, controllable, efficient, collaborative, and closely matched".
8. Shanghai: Provide the highest industrial policy support for integrated circuits, etc
On July 4th, the Office of the Leading Group for Investment Promotion in Shanghai issued the "Several Measures on Strengthening Services and Improving Environment to Further Promote the Brand of 'Investing in Shanghai'", which proposed to support industrial chain consortium projects. Accelerate the cultivation of key industrial chains and implement consortium support policies for key industrial chains such as integrated circuits, large aircraft, shipbuilding and marine, and information and innovation industries. Support high-quality enterprises to strengthen their chains, provide the highest industrial policy support for high-quality projects, and support the simultaneous implementation of key areas and core links in the upstream and downstream of the industrial chain.