Taiwan Semiconductor Manufacturing Co (TSM) has dramatically accelerated its ambitious 2-nanometer chip production, marking a significant leap forward in the global semiconductor industry. The company recently held an equipment installation ceremony for its advanced 2-nanometer fabrication plant (fab) in Kaohsiung, a full six months ahead of schedule. This impressive feat underscores TSM’s commitment to meeting the exploding global demand for cutting-edge chips, particularly in the rapidly expanding fields of artificial intelligence (AI) and high-performance computing (HPC).
Kaohsiung Mayor Chen Chi-mai highlighted the monumental achievement during a city council Q&A session, emphasizing the fab’s transformative potential for the region. The facility is poised to not only boost AI applications but also serve as a catalyst for substantial industrial transformation in Kaohsiung and beyond. This strategic move reinforces Taiwan’s position as a crucial player in the global semiconductor landscape.
TSM’s investment in Kaohsiung extends far beyond this single fab. The company plans to establish four additional fabs in the city, complementing its existing 3-nanometer and 5-nanometer facilities. Mayor Chen envisions this concentration of advanced semiconductor manufacturing as the creation of one of the world’s most valuable semiconductor clusters. This strategic expansion is further bolstered by the influx of material, equipment, and parts suppliers who have also established operations in Kaohsiung, creating a robust and self-sustaining ecosystem.
The company confirmed to the Taipei Times that its 2-nanometer technology is on track for mass production by next year. Even more encouraging, performance and yield already meet or exceed initial expectations. This rapid progress is mirrored by a similar production line currently under construction at TSM’s Hsinchu facility, demonstrating the company’s commitment to scaling production to meet the overwhelming demand.
TSM Chairman and CEO C.C. Wei recently revealed to investors that the demand for 2-nanometer technology has surpassed even their optimistic projections, outstripping the capacity of their 3-nanometer chips. These highly advanced chips are earmarked for smartphones and high-performance computing applications, with industry giants like Apple Inc (AAPL) and Advanced Micro Devices Inc (AMD) expected to be among the early adopters.
Recent reports suggest AMD is leveraging TSM’s 3nm process to enter the smartphone market, targeting flagship devices, potentially competing with Samsung’s top models. Furthermore, TSM is aggressively preparing capacity for its A16 chips, which are in exceptionally high demand for AI server applications. Wei emphasized the company’s unwavering commitment to scaling both 2-nanometer and A16 production to meet the growing needs of their clients.
To support this aggressive expansion, TSM is planning capital expenditures of between $34 billion and $38 billion in 2025, solidifying its position at the forefront of advanced semiconductor manufacturing. This massive investment highlights the company’s confidence in future demand and its strategic vision for dominating the industry. The premarket trading on Wednesday showed TSM stock down 1.06% at $181.89, indicating a slight market correction despite the positive technological advancements.
