TSMC reaffirms plans to mass-produce 2nm chips by late 2025, bolstering AI and mobile tech, while navigating U.S.-China tensions and foundry rivalry with Samsung and Intel.
TSMC confirms 2nm chip production for late 2025, aiming to extend its foundry dominance amid escalating U.S.-China tech tensions and rival investments.
Next-Gen Chip Race Intensifies
Taiwan Semiconductor Manufacturing Co (TSMC) reiterated during its May 2024 investor call that it remains on track to begin mass production of 2-nanometer (2nm) chips in Q4 2025. The node, utilizing Gate-All-Around (GAA) transistor architecture, promises up to 35% performance gains for AI accelerators and 50% power efficiency improvements compared to current 3nm technology, according to company specifications.
Geopolitical Headwinds Emerge
The announcement comes as the U.S. Department of Commerce considers stricter export controls on advanced chipmaking tools to China, per a May 14 Reuters report. TSMC derives nearly 12% of its revenue from Chinese clients, though analysts note its Arizona fab expansion – bolstered by a $4.86 billion investment revealed May 15 – could help mitigate supply chain risks.
Competitors Mobilize
Samsung secured $6.4 billion in U.S. CHIPS Act funding on May 14 for its Texas-based 2nm facility, while Intel landed a $3.5 billion Department of Defense contract on May 13 to develop military-grade chips using its 18A process. ASML’s shipment of High-NA EUV lithography tools to TSMC (reported May 12) remains critical for achieving viable 2nm yields.
AI Demand Drives Innovation
TSMC is concurrently expanding its CoWoS advanced packaging capacity to meet surging demand for NVIDIA’s Blackwell GPUs, with industry sources indicating 2nm production could initially prioritize AI chip clients before expanding to smartphone makers like Apple, which has reportedly reserved early capacity for 2026 iPhones.Historical data shows TSMC commanded 60% of the global foundry market in Q1 2024, though its 3nm node faced yield challenges that delayed volume production by six months in 2023. The 2nm transition risks similar hurdles given its reliance on unproven GAA architecture.The semiconductor industry last faced comparable geopolitical disruptions during the 2020 U.S.-China trade war, when TSMC suspended shipments to Huawei following Washington’s sanctions. Current export control proposals could further complicate tech supply chains, mirroring challenges seen during the COVID-19 chip shortage crisis.
