Thank you, Wendell. Good afternoon everyone. First, let me start with conclusion of 2024 and our 2025 outlook. 2024 was a mixed year of recovery for the global semiconductor industry.
AI-related demand was strong while our other applications saw only a very mild recovery, as macroeconomic conditions weigh on consumer sentiment and end market demand. Concluding 2024, the Foundry 2.0 industry, which we define as all logic wafer manufacturing, packaging, testing, mask making and others increased 6% year-over-year, slightly lower than our previous forecast. Supported by strong demand for our leading edge process technologies, TSMC's revenue increased 30% year-over-year in US dollar term, outperformed the foundry industry growth. Entering 2025, we expect fabless semiconductor inventory to have returned to a healthier level, exceeding 2024. We forecast the Foundry 2.0 industry to grow 10% year-over-year in 2025, supported by robust AI-related demand and a mild recovery in other end market segments. Supported by our technology leadership and broader customer base, we are confident we can continue to outperform the industry growth. We expect 2025 to be another strong growth year for TSMC, and forecast our full year revenue to increase by close to mid-20s percent in US dollar term.
Now, I will talk about AI demand and TSMC's long-term growth outlook. We observed robust AI-related demand from our customers throughout 2024. Revenue from AI accelerators, which we now define as AI GPU, AI ASICs and HBM controller for AI training and inference in the data center, accounted for close to mid-teens percent of our total revenue in 2024. Even after more than tripling in 2024, we forecast our revenue from AI accelerator to double in 2025, as a strong surge in AI-related demand continues. As a key enabler of AI applications, the value of our technology platform is increasing as customers rely on TSMC to provide the most advanced process and packaging technologies at scale in the most efficient and cost-effective way. To address the structural increase in the long-term market demand profile, TSMC is working closely with our customer to plan our capacity and investing in leading edge specialty and advanced packaging technologies to support their growth. As we have said before, TSMC employs a disciplined and a rough capacity planning system to evaluate and judge the market demand to determine the appropriate capacity build. This is especially important when we have such high forecast demand from AI-related business. At the same time, we are committed to earning a sustainable and healthy return that enable us to continue to invest to support our customers, of course, while delivering profitable growth for our shareholders.
Underpinned by our technology leadership and broad customer base, we now forecast the revenue growth from AI accelerators to approach a mid-40% CAGR for the five-year period, starting off the already higher base of 2024. We expect AI accelerators to be the strongest driver of our HPC platform growth and the largest contributor in terms of our overall incremental revenue growth in the next several years. Looking ahead, as the world's most reliable and effective capacity provider, TSMC is playing a critical and integral role in the global semiconductor industry. With our technology leadership, manufacturing excellence and customer trust, we are well positioned to address the growth from the industry megatrend of 5G, AI and HPC with our differentiated technologies. For the five-year period starting from 2024, we expect our long-term revenue growth to approach a 20% CAGR in US dollar term, fueled by all four of our growth platforms which are smartphone, HPC, IoT and automotive. Next, let me talk about our global manufacturing footprint update.
All our overseas decisions are based on our customers need, as they value some geographic flexibilities and the necessary level of government support. This is also to maximize the value for our shareholder. In the US, we have a long-standing good relationship with the US Government, dating back to even before our Arizona fab project announcement in May 2020. We have received strong commitment and support from the U.S. customers and the U.S. federal, state and city government, and are making substantial progress. Building on the successful result of our earlier engineering wafer production, we were able to pull ahead the production schedule of our first fab in Arizona. Our first fab has already entered the high-volume production in 4Q 2024 utilizing N4 process technology with a yield comparable to our fabs in Taiwan. We expect a smooth ramp-up process and with our strong manufacturing capability and execution, we are confident to deliver the same level of manufacturing quality and reliability from our fab in Arizona as from our fab in Taiwan. Our plans for second fab and third fab in Arizona are also on track.
These fabs are utilizing even more advanced technologies, such as N3, N2, and A16 based on our customers' need. Thus, TSMC will continue to play a critical and integral role in enabling our customers' success while remaining a key partner in enabling of the US semiconductor industry. Next, in Japan, thanks to the strong support from the Japan central, prefectural, and local government, our progress is also very good.
Our first specialty technology fab in Kumamoto has started volume production at the end of 2024 with record yield. Construction of our second fab, specialty fab, is scheduled to begin this year. In Europe, we have received strong commitment from the European Commission and the German federal, state and city government. We are progressing smoothly with our plans to build a specialty technology fab in Dresden, Germany, focusing on automotive and industrial applications.
In Taiwan, we continue to receive support from Taiwan government, and we are investing in and expanding our advanced technology and packaging capacities. Given the robust multi-year demand for our 3 nanometer technology, we continue to expand our 3 nanometer capacity in Tainan Science Park. We are also preparing for multiple phases of 2 nanometer fabs in both Hsinchu and Kaohsiung Science Park to support the strong structural demand from our customers. We are also expanding our advanced packaging facilities across several locations in Taiwan.
As we have said before, under today's fragmented globalization environment, overseas fab costs are higher for everyone, including TSMC and all other semiconductor manufacturers. We are leveraging our fundamental competitive advantage of manufacturing technology leadership and large-scale manufacturing base to be the most efficient and cost-effective manufacturer in the region that we operate while supporting our customers' growth. Finally, I will talk about N2 and A16 introduction. Our 2 nanometer and A16 technologies lead the industry in addressing the insatiable need for energy-efficient computing, and almost all the innovators are working with TSMC. We expect a number of the new tapeout for 2 nanometer technology in the first two years to be higher than both 3 nanometer and 5 nanometer in their first two years, fueled by both smartphone and HPC applications.
N2 will deliver full-node performance and power benefit with 10 to 15 speed improvement at the same power or 20% to 30% power improvement at the same speed, and more than 15% chip density increase as compared with the N3E. N2 is well on track for volume production in second half of 2025 as scheduled, with a ramp profile similar to N3. With our strategy of continuous enhancement, we also introduced N2P as an extension of N2 family. N2P features further performance and power benefit on top of N2. N2P will support both smartphone and HPC applications, and volume production is scheduled for second half 2026.
We will also introduce A16 featuring Super Power Rail, or SPR, a separate offering. TSMC's SPR is an innovative best-in-class backside power delivery solution that is first in the industry to incorporate a novel backside network scheme that preserves gate density and device with flexibility to maximize the product benefit. Compared with the N2P, A16 provide a further 8% to 10% speed improvement at the same power, or 15% to 20% power improvement at the same speed, and additional 7% to 10% chip density gain. A16 is best suitable for specific HPC products with a complex signal route and dense power delivery network.
Volume production is scheduled for second half 2026. We believe N2, N2P, A16 and its derivative will further extend our technology leadership position and enable TSMC to capture the growth opportunity well into the future. This concludes our key message. And thank you for your attention.