TSMC, the world’s largest semiconductor manufacturer, is struggling to meet the demand for next-generation technologies. With its current production capacity insufficient for global needs, the company has launched a massive investment drive at home. According to reports, the manufacturer plans to build three new facilities specifically focused on 2nm chip production. The primary driver behind this critical move is attributed to the unquenchable market demand.
A $28 billion solution to the semiconductor crisis: TSMC is expanding capacity
The company’s initial investment for these new facilities is reportedly approximately $28.6 billion. Previously shared information revealed that TSMC’s two existing domestic 2nm facilities have reached their maximum production threshold. While the target is to reach 100,000 wafers per month by the end of next year, this amount is insufficient to meet the needs of major technology companies.
TSMC currently operates a total of seven 2nm facilities in Hsinchu Science Park and Kaohsiung. However, because even these facilities cannot handle the load, the company is preparing to begin construction near the Southern Taiwan Science Park Special Zone. The estimated initial investment required for each facility is reportedly 300 billion New Taiwan Dollars (approximately $9.54 billion). This investment is considered the price of being the only institution capable of advanced lithography production.
The company is not limited to 2nm; it has also begun construction on a facility in Taichung, dubbed “A14,” for the production of 1.4nm, the technology of the future. The initial cost of these facilities is reaching a staggering $49 billion. TSMC’s rapid expansion of its 2nm facilities is driven by Apple. It is rumored that Apple has already secured more than half of its initial supply for the A20 and A20 Pro chipsets to be used in the iPhone 18 series.
This means that other giants like Qualcomm and MediaTek will be forced to share the remaining capacity for the upcoming Snapdragon 8 Elite Gen 6 and Dimensity 9600 processors. TSMC has been forced to take control to balance this competition among its customers and fulfill orders. It’s not yet clear how much monthly production will increase once the new facilities are fully operational.
What are your thoughts on this race for processors, which will form the heart of next-generation devices, and the rising production costs? Don’t forget to share your expectations with us in the comments section.
