2 nanometers, heavyweight update

TSMC's 2nm will be mass-produced in the second half of next year and is currently in full swing for trial production. The production process of Fab20 factory in Baoshan, Hsinchu has come to an end and trial production will begin in July. The first P1 factory of Fab22 in Kaohsiung is also about to be completed, and equipment installation is expected to begin in December. The earliest trial production will be in the second quarter of next year.

According to foreign media reports, TSMC has conducted a risky trial production of 2 nanometers to ensure a stable yield before mass production. As early as December last year, TSMC had already demonstrated the test results of its 2-nanometer process technology prototype to Apple and Huida.

Regarding the progress of the 2-nanometer trial production? TSMC stated that the 2-nanometer process technology is proceeding as planned. The construction projects of wafer fabs in Kaohsiung and Arizona, USA, are proceeding according to plan and progressing well.

Liu Pei chen, Director of the Taiwan Economic Research Institute's Product and Economic Database, stated in an interview with the Taiwan Daily News that TSMC had originally planned to conduct a trial production of 2 nanometers in the second half of this year, and had previously heard that the installation time was earlier than originally expected. It seems that 2 nanometers are expected to enter mass production in the second half of next year.

Where is the 2-nanometer production base located? She mentioned that Baoshan in Hsinchu is the first production base for 2 nanometers. In addition, after the completion of the three factories in Kaohsiung, they will also simultaneously produce 2-nanometer chips.

Kaohsiung factory will start equipment installation! Trial production in Q2 next year

According to supply chain sources cited by the media, the construction of the first Kaohsiung 2 nanometer factory is about to be completed, and equipment installation is expected to begin in December, with trial production starting as early as the second quarter of next year. As for the installation schedule of the second factory in Kaohsiung, it will fall in the second half of next year or even early next year, with a monthly production capacity of around 20000 pieces for both factories.

For overseas factories, the first Fab21 Arizona factory in the United States is undergoing trial production and will mass produce 4 nanometers next year. Liu Peizhen believes that TSMC's most advanced processes will be run in Taiwan first, and it is also necessary to confirm whether the "yield" can reach a certain level and weigh the cost-effectiveness. It is reasonable to move to the United States for mass production of related production lines in the future.

According to the latest report from Morgan Stanley, TSMC's monthly production capacity of 2 nanometer wafers will increase from 10000 trial wafers this year to around 50000 wafers next year. By 2026, the A20 chip built into Apple's iPhone 18 will be mass-produced using a 2-nanometer process, with a monthly production capacity of 80000 pieces. The production capacity of 3 nanometers will be simultaneously expanded to 140000 pieces, of which the Arizona plant in the United States will have a production capacity of 20000 pieces.

First product with built-in 2-nanometer chip → Macbook Pro

Apple is undoubtedly TSMC's largest customer, contributing up to 25% of TSMC's revenue last year. Apple will also become TSMC's first customer for the 2-nanometer technology, and it is reported that it has already taken over all of TSMC's initial production capacity for the production of M5 chips. The MacBook Pro laptop with built-in M5 chips is expected to become one of the first new products to adopt the 2-nanometer process.

In addition to the MacBook Pro laptop, renowned analyst Kuo Ming chi recently stated that the processor (code name A19) of the iPhone 17 in 2025 will still use TSMC N3P (second-generation 3-nanometer) process; The processor of iPhone 18 will only adopt the 2-nanometer process in 2026, but due to cost considerations, not all processors of iPhone 18 in the entire series will use the 2-nanometer process at that time.

Which other IC design factories will place orders for 2 nanometers?

Liu Peizhen mentioned that besides Apple, IC design companies such as high-performance computing, AI chips, and even mobile phone processors will all be customers of TSMC's 2nm. Including Supermicro, Huida, MediaTek, and Qualcomm, they are all potential customers for the 2 nanometer technology. There are also opportunities in the automotive electronics field, such as NXP possibly adopting the 2 nanometer technology in the later stage.

She pointed out that in terms of accepting orders at 2 nanometers, TSMC is significantly better than Intel and Samsung, and many major manufacturers have expressed their intention to place orders at TSMC 2 nanometers. Therefore, there will not be too much problem in filling the utilization rate of 2-nanometer production capacity in the future. The dominance of 3-nanometer and N3P orders will continue into the 2-nanometer process, continuing to establish TSMC's leading international position in advanced processes worldwide.

Wei Zhejia: Customer hopes to enter the 2-nanometer process as soon as possible

How eager are IC design giants for the demand of 2 nanometers? TSMC Chairman and President Wei Zhe jia once said that customers have shown high interest and participation in the 2 nanometer process, and they all hope to enter N2 (2 nanometer), N2P, and even A16 processes as soon as possible. At the same time, they also hope that advanced processes in the future can further reduce power consumption. Wei Zhe jia hopes to establish sufficient production capacity in the next two years to meet customer needs.

TSMC's 2-nanometer technology adopts a nanosheet transistor structure, which will be the most advanced semiconductor technology in terms of density and energy efficiency in the industry. "He also arrogantly stated," After TSMC enters the 2-nanometer process, there will only be one manufacturer in the world that is not TSMC's customer, the rest are. TSMC will start mass production of 2-nanometer in the fourth quarter of 2025; As for the actual contribution of 2 nanometers to revenue, it will start from the end of the first quarter or the beginning of the second quarter of 2026.

Wei Zhejia emphasized that N2 is a very complex and massive technological node. The customer spent more time preparing the product design draft (tape outs). So they are all in contact with TSMC in the early stages, hoping to ensure product blueprints and increase production capacity. From the perspective of product cycle time, N2 will contribute more to revenue than N3, just as N3 contributes more to revenue than N5.

Samsung and Intel want to overtake on a bend?

As for TSMC's competitor Samsung, according to South Korean media reports, Samsung's 2-nanometer (GAA surround gate) yield rate is less than 20%, and it has decided to withdraw from its Taylor plant in Texas, USA, leaving only a few staff members. Liu Peizhen said, "Samsung's investment in US factories has slowed down, reflecting the company's difficulties in wafer foundry business, and it is indeed unable to win more customers from TSMC

Speaking of Intel again, she admitted, "They are currently facing layoffs and capital expenditure cuts, as well as numerous operational disruptions, making it difficult for them to focus on advancing advanced processes. It is indeed quite challenging for them to overtake TSMC in a bend

Zhang Xiaoqiang, Senior Vice President of Business Development and Global Operations at TSMC, once pointed out that N2 (2 nanometer) technology is a revolutionary node that changes the transistor architecture from FinFET (FinFET) to Nanosheet (nanosheet transistor). Through continuous strengthening and innovative structural design technology collaborative optimization, nanosheet transistors can provide excellent energy efficiency; Currently, N2 is progressing smoothly, with a conversion target of 90% and a yield rate exceeding 80%.

By adjusting the width of the components, N2 combined with NanoFlex innovative technology can maximize the advantages of performance, power consumption, and surface area (PPA). Lower height components can effectively save area and have higher energy efficiency, while higher height components maximize efficiency. Customers can optimize the combination of high and low components in the same design block, increasing speed by 15% while achieving the best balance between area and energy efficiency.

TSMC stated that the 2-nanometer process technology provides full generation performance and power advantages, with a speed increase of 10-15% compared to N3E at the same power consumption; At the same speed, power consumption decreases by 25-30%, while chip density increases by more than 15%. The number of tape outs in the first two years of product design finalization for 2-nanometer technology will be higher than the performance of the same period for 3-nanometer and 5-nanometer technologies.

TSMC emphasizes that the research and development of the 2-nanometer process technology is progressing smoothly, with device efficiency and yield meeting or even exceeding expectations. It will enter mass production as scheduled in 2025, and its production curve is expected to be similar to that of the 3-nanometer process. N2P is an extension of the 2-nanometer family, with a 5% increase in efficiency compared to N2 and a 5-10% power consumption advantage. It is planned to be mass-produced in the second half of 2026; N2X is also planned to be launched in 2026.