AI to Overtake Smartphones as Semiconductor Growth Engine, Global Chip Output to Hit $1.5 Trillion by 2030
Kevin Zhang, Deputy Co-COO and Senior Vice President for Business Development and Global Sales at Taiwan Semiconductor Manufacturing Co. (TSMC), made the projection on Thursday while speaking at the company's 2026 Taiwan Technology Symposium in Hsinchu.
Artificial intelligence is on course to displace smartphones as the primary growth driver for the global semiconductor industry, with chip output projected to reach $1.5 trillion by 2030 — a forecast that underscores just how fundamentally AI is restructuring the economics of the technology sector.
Kevin Zhang, Deputy Co-COO and Senior Vice President for Business Development and Global Sales at Taiwan Semiconductor Manufacturing Co. (TSMC), made the projection on Thursday while speaking at the company's 2026 Taiwan Technology Symposium in Hsinchu. Zhang described AI as potentially the most important and influential technology in human history, noting that its development had advanced far faster than anticipated and was rapidly reshaping the global technology landscape.
The numbers Zhang cited are striking in their specificity. AI and high-performance computing applications are expected to account for 55 per cent of the global semiconductor market by 2030, compared to 20 per cent for smartphones and 10 per cent each for automotive and Internet of Things applications. The global foundry sector alone, he said, could reach $500 billion by that year.
The structural shift Zhang described is already visible in how AI chips are being produced. Nearly all current AI accelerators are manufactured through the fabless-foundry model, which separates chip design from physical manufacturing. Under this model, semiconductor companies focus on design while outsourcing the increasingly capital-intensive fabrication process to foundries such as TSMC, allowing innovation cycles to accelerate without requiring each design company to build and maintain its own manufacturing infrastructure.
Zhang was careful not to write smartphones off entirely. Handsets powered by chips built on TSMC's 2-nanometre process technology are expected to reach consumers later this year, and he acknowledged that smartphones would continue to drive semiconductor innovation even as their share of overall growth diminishes relative to AI workloads.
Ray Wan, TSMC's Director of Asia-Pacific Business, added further context on the geographic and application spread of AI-driven demand. AI, he noted, is rapidly expanding beyond cloud data centres into edge devices including smartphones, home appliances, and automobiles, with smartphones increasingly functioning as personal AI assistants rather than purely communication and media consumption devices. To illustrate the scale of demand this is generating, Wan said TSMC customers across the Asia-Pacific region consumed more than 2.1 million 12-inch equivalent wafers last year — a volume that, if stacked vertically, would exceed 1,600 metres, taller than three Taipei 101 skyscrapers combined.
Zhang also highlighted Taiwan's position within this supply chain, describing the island as home to the world's strongest AI supply chain, citing partnerships between TSMC and Taiwanese electronics manufacturers including Quanta Computer as evidence of the ecosystem depth that makes Taiwan difficult to replicate or replace in the near term.
Published By : Shubham Verma
Published On: 14 May 2026 at 16:31 IST