The semiconductor industry is gearing up for a new technological leap. Taiwan Semiconductor Manufacturing Company (TSMC), the largest chip manufacturer worldwide, has confirmed that its 2-nanometer (N2) process will be ready for volume production by Q4 2025, with top-tier clients like Apple, AMD, Qualcomm, Broadcom, Intel, and MediaTek already committed to securing capacity at this strategic node.
This milestone marks a turning point not only because of the technical complexity involved but also due to its economic and geopolitical significance, especially as AI chips and high-performance computing (HPC) become critical global assets.
Production in 2025 and strategic clients
According to information published by Digitimes, TSMC will meet its schedule and commence mass manufacturing of 2nm chips before the end of 2025. Initial demand is led by Apple, which is securing approximately 50% of available capacity at this node, solidifying its role as a primary customer for Taiwan’s foundry.
Following are Qualcomm — with its Snapdragon processors for mobile and PCs —, AMD in CPU and GPU sectors, Intel with part of its IDM 2.0 strategy, Broadcom, and MediaTek.
By 2026, production is expected to skyrocket, and by 2027, other giants like NVIDIA, Amazon (Annapurna Labs), Google, Marvell, and Bitmain among over a dozen key companies will join the fray.
The race to secure capacity
The entry price for the 2nm node is significant: $30,000 per wafer, a record high in the industry. Despite this cost, manufacturers are not pulling back but instead accelerating their orders, aware that TSMC’s capacity is limited and that missing out could put them at a competitive disadvantage against rivals.
The fear of losing access to wafers has led several clients to reserve production years in advance, a practice already common at 5nm and 3nm nodes, now intensifying with 2nm due to surging demand in AI and HPC computing.
Expansion in Taiwan, Arizona, and beyond
To meet this demand, TSMC is aggressively expanding capacity. Its facilities in Hsinchu Baoshan (Fab 20) and Kaohsiung (Fab 22) will serve as the main 2nm production hubs in Taiwan.
- By late 2025, both plants will reach a combined capacity of 45,000 to 50,000 wafers monthly.
- In 2026, this figure will exceed 100,000 wafers per month.
- By 2028, with the addition of the second phase of the Arizona plant (Fab 21 P2) and the upcoming Fab 23 P3 in the U.S., production of 2nm is projected to reach 200,000 wafers monthly.
This deployment reinforces TSMC’s strategic diversification of its geographical footprint, reducing risks amid geopolitical tensions in the Taiwan Strait. The company has already announced that 30% of its 2nm capacity will be located in the United States, primarily in Arizona.
Competition and external challenges
TSMC faces pressure from competitors. Samsung Electronics and Japan’s Rapidus have attempted to position themselves as alternatives in advanced nodes, but so far their impact on TSMC’s order volume has been limited.
Moreover, the company must contend with economic and political challenges:
- Currency fluctuations and international tariffs.
- Growing manufacturing costs, especially in new factories outside Taiwan.
- U.S. government intervention, including subsidies and rumors of involvement with Intel or influence over the semiconductor ecosystem.
Despite these tensions, TSMC has raised its revenue forecast for 2025, increasing estimates from a 25% to 30% growth, mainly driven by AI and HPC chip demand.
Roadmap: N2P, A16, and A14
The N2 node is not the final stop. The company has outlined its technological roadmap:
- N2P, an enhanced version of 2nm, will start in the second half of 2026.
- A16, an advanced node with “Angstrom” architecture, will also debut in 2026.
- A14, scheduled for 2028, will initially be manufactured at Fab 25 in Taichung, which is already under construction.
These developments will drive the transition to sub-2nm technologies as TSMC aims to maintain its leadership against Samsung and forthcoming Intel advancements.
The enduring relevance of 4nm and 3nm
While the spotlight is on 2nm, nodes of 4nm and 3nm will remain critical until at least 2026. For example, NVIDIA will manufacture its upcoming Rubin GPUs on a 3nm process, which TSMC considers “highly profitable” due to the high wafer prices and strong demand.
In fact, TSMC states that its 5nm, 4nm, and 3nm lines are at full capacity, with no available slots through the end of 2026, highlighting the current demand intensity.
U.S. expansion as a capacity redistribution strategy
Expanding in Arizona is part of a broader global capacity redistribution strategy. As 2nm nodes come online in the U.S., TSMC plans to ensure that at least 30% of its total capacity at this node is outside Taiwan.
This shift addresses Washington’s push to reduce dependence on chips produced in Asia, especially amid rising technological rivalry with China.
Market impact and forecasts
The launch of 2nm is more than a technological milestone: it will reshape global semiconductor competition. With higher performance and energy efficiency, chipmakers will be able to design faster, low-power processors, vital for everything from mobile devices and laptops to AI data centers.
The impact will also be reflected in TSMC’s revenue distribution. Currently, 75% of sales come from U.S. clients. With 2nm, this might surpass 80% in the coming years, consolidating Silicon Valley’s dominance as the primary beneficiary.
Conclusion
TSMC’s deployment of 2nm chips confirms that the semiconductor industry is experiencing an unprecedented race driven by AI, geopolitics, and technological innovation. With Apple as a key client and an ecosystem increasingly dependent on its capacity, TSMC is positioned to maintain its global leadership amid competitors still catching up.
The next decade will be defined not only by the race to develop the most advanced chips but also by securing production capacity at strategic nodes. In this arena, TSMC still holds the advantage.
FAQs
1. What advantages do 2nm chips offer over 3nm or 5nm ones?
2nm chips enable higher transistor density, better energy efficiency, and greater performance, resulting in faster processors with lower power consumption.
2. Why is Apple the main client for TSMC’s 2nm?
Apple accounts for nearly 50% of production capacity because it depends on the most advanced nodes to differentiate its devices, such as iPhones and Macs with Apple Silicon processors.
3. What role will the U.S. factories play?
The Arizona plants will produce up to 30% of TSMC’s total 2nm capacity, responding to U.S. government pressure to ensure local supply.
4. Will 4nm and 3nm nodes remain relevant with the advent of 2nm?
Yes. Although 2nm will lead the frontier, 4nm and 3nm nodes will continue to be heavily used until at least 2026 due to the high demand for GPUs, CPUs, and AI chips at those process sizes.
via: digitimes.com.tw