TSMC Accelerates 2nm Expansion as AI Chip Demand Surges

Taiwan Semiconductor Manufacturing Co. (TSMC) is accelerating the expansion of its advanced 2-nanometre chip production capacity as rising demand from artificial intelligence and high-performance computing customers drives stronger orders, according to Taiwanese publication EDN.

TSMC’s monthly 2nm manufacturing capacity could reach approximately 120,000 wafers by the end of 2026, exceeding previous industry estimates of between 90,000 and 100,000 wafers per month. The faster expansion reflects growing demand for cutting-edge semiconductors used in AI accelerators, data centres, smartphones and other high-performance devices.

Major TSMC customers, including Apple, Nvidia, Advanced Micro Devices, Qualcomm and MediaTek, have recently increased orders for the chipmaker’s 2nm process family by between 10% and 20%, EDN reported Monday, citing industry sources.

The higher orders come as technology companies continue investing heavily in AI infrastructure, increasing demand for advanced chips that deliver greater computing performance while improving power efficiency.

TSMC is also expanding its manufacturing footprint to support the anticipated increase in 2nm production. The semiconductor giant is bringing five 2nm fabrication plants online this year, including two facilities in Hsinchu and three in Kaohsiung, according to EDN, which cited TSMC Senior Vice President Hou Yung-ching.

Hou said TSMC’s first-year output of 2nm wafers is expected to be 45% higher than the first-year production volume achieved by its 3nm technology in 2023.

The company also expects its 2nm manufacturing capacity to expand at a compound annual growth rate of about 70% between 2026 and 2028.

The rapid production ramp highlights the importance of TSMC’s next-generation semiconductor technology as customers including Nvidia, AMD and Apple compete to develop increasingly powerful AI and computing products. Stronger-than-expected orders could further reinforce TSMC’s position as a critical supplier of advanced chips to the global technology industry.