In the first quarter of 2025, although the global semiconductor foundry market will decline, the decline will be significantly slower than the same period in previous years. This was due to the near-end of trade policy and the unexpected help from overseas stimulus policies, which cushioned the impact of the seasonal off-season.
According to TrendForce, global foundry revenue reached $36.4 billion in the first quarter of 2025, down 5.4% from the previous quarter. The slight decline is mainly due to the fact that customers preemptively placed orders to meet the deadline for reciprocal tariff exclusions in the United States, and the continued benefits from China's 2024 consumption subsidy policy, which combined to keep foundry capacity utilization at a high level.
Market performance is directly affected by the intertwined impact of geopolitics and domestic demand policies. The U.S. is about to adjust its tariff policy, triggering customers to purchase in advance to lock in supply, avoid potential cost increases, and promote the concentrated explosion of foundry orders. At the same time, China's policies to stimulate the consumer market have also continued to boost the demand for electronic components, especially for OEMs that are deeply involved in the Chinese market.
Figure: Top 10 global foundry revenue in Q1 2025
Regional manifestations are clearly differentiated
The impact varies by region and manufacturer. As the market leader, TSMC achieved a slight decline of only 5% to $25.5 billion in revenue with a market share of 67.6%. While smartphone shipments were impacted by the off-season, strong demand for artificial intelligence high-performance computing (AI HPC) and urgent TV orders due to tariffs cushioned the decline in revenue.
On the other hand, Samsung foundry, with a market share of 7.7%, saw its revenue fall 11.3% quarter-on-quarter to $2.89 billion. The analysis pointed out that Samsung's limited benefit from China's consumer subsidy policy, coupled with the continued restrictions on its advanced process technology in the United States, put pressure on performance.
Policy-driven stocking in advance has most significantly benefited Chinese foundries and companies with close ties to the Chinese market. SMIC's revenue rose 1.8% to $2.25 billion, ranking third. Stockpiling in advance and subsidies effectively offset the impact of the decline in average selling prices.
At the same time, Hua Hong Semiconductor and Goodix Technology recorded slight revenue growth (up 1.7% and 2.6%, respectively), both due to urgent orders and stocking needs triggered by tariffs and subsidies. PSMC also benefited from consumer rush orders, with stable capacity utilization and a revenue decline of 1.8%.
Conversely, foundries that are less connected to the Chinese market and have not benefited from subsidies are feeling more pronounced seasonal pressures. GlobalFoundries' customer base, which is mainly located outside of China, did not enjoy the subsidy dividend, and its revenue fell 13.9% sequentially to $1.58 billion. Tower Semiconductor's revenue also fell 7.4% to $358 million due to seasonal weakness and lack of subsidy support.
Future outlook
Looking ahead to the second quarter of 2025, there will be a shift in market drivers. The tariff-driven panic buying effect is unlikely to be sustainable, but the continued impact of China's subsidy policies, the need for inventory construction due to the launch of new smartphones, and the steady growth of the AI HPC field will jointly support capacity utilization, which is expected to drive the revenue rebound of the top 10 foundries.
The dual effect of continuous policy fermentation and traditional product cycles will become the key variable in the market trend in the next few months.
