Second-tier foundries' repair rally lifts margins back to 30%

The resurgence in profit margins among second-tier foundries signals a deeper shift as AI workloads increasingly migrate to mature process nodes. With demand for mid-range processes rising due to large model training and inference, these fabs are leveraging improved cost structures and customer mix to regain profitability. Technologically, this trend prompts Fabless companies to reassess their process strategies, favoring cost-effective nodes. From a geopolitical standpoint, ongoing tensions are accelerating supply chain localization, pushing fabs to boost capacity utilization amid uncertainty. In competitive dynamics, leading players may pursue M&A to consolidate, while smaller firms face viability challenges. Over the next 12–24 months, sustained AI adoption in mature nodes will likely sustain demand, though upstream equipment and materials suppliers must brace for overcapacity risks.