Despite responding to the market downturn by cutting CapEx investments, semiconductor foundries had to fight over fewer orders while more capacity came online. The capacity is growing at 8%, similar to the current average global semiconductor market growth. The problem is the timing. When you invest at the peak, you get it in the trough. With declining utilisation rates, some of the less fortunate foundries had to fight over the scraps and have seen declining wafer ASP's. TSMC's leadership in technology meant they could afford to compete and outcompete everybody in the mature technologies but decided not to. Despite 3 quarters of improving utilisation rates, TSMC is still only at 72% utilisation rate. This typically means depressed profitability, but the Taiwanese powerhouse is capturing 90% of all the operating profits in the foundry market. TSMC could have crushed the competition in this down-cycle but decided not to. Only TSMC knows why, but the company has more depth than your average corporation. Read more about the foundry industry here: