Producing 2nm chips, the most cutting-edge in the industry

 Taiwanese giant TSMC has started mass producing its cutting-edge 2-nanometre semiconductor chips, the company said in a statement. TSMC is the world's largest contract maker of chips, used in everything from smartphones to missiles, and counts Nvidia and Apple among its clients. TSMC also has been a massive beneficiary in the AI investment scene globally. Nvidia and Apple are among firms pouring many billions of dollars into chips, servers and data centres.

According to the company, the chips will be the "most advanced technology in the semiconductor industry in terms of both density and energy efficiency

"TSMC's 2nm (N2) technology has started volume production in 4Q25 as planned," TSMC said in the statement on its website

N2 technology, with leading nanosheet transistor structure, will deliver full-node performance and power benefits to address the increasing need for energy-efficient computing."

The chips will be produced at TSMC's "Fab 20" facility in Hsinchu, in northern Taiwan, and "Fab 22" in the southern port city of Kaohsiung.

More than half of the world's semiconductors, and nearly all of the most advanced ones used to power artificial intelligence technology, are made in Taiwan.

AI-related spending is soaring worldwide, and is expected to reach approximately $1.5 trillion by 2025, according to US research firm Gartner, and over $2 trillion in 2026 -- nearly two percent of global GDP.

Taiwan's dominance of the chip industry has long been seen as a "silicon shield" protecting it from an invasion or blockade by China -- which claims the island is part of its sovereign territory -- and an incentive for the United States to defend it.

TSMC’s 2nm (N2) technology has started volume production in 4Q25 as planned. N2 technology features first-generation nanosheet transistor technology, with full-node strides in performance and power consumption. TSMC also developed low-resistance redistribution layer (RDL) and super high-performance metal-insulator-metal (MiM) capacitors to further boost performance.

TSMC N2 technology will be the most advanced technology in the semiconductor industry in terms of both density and energy efficiency. N2 technology, with leading nanosheet transistor structure, will deliver full-node performance and power benefits to address the increasing need for energy-efficient computing. With our strategy for continuous enhancements, N2 and its derivatives will further extend TSMC technology leadership well into the future.

Taiwan's world-leading microchip manufacturer TSMC says it has started mass producing next-generation "2-nanometre" chips.

AFP looks at what that means, and why it's important:

What can they do?

The computing power of chips has increased dramatically over the decades as makers cram them with more microscopic electronic components.

That has brought huge technological leaps to everything from smartphones to cars, as well as the advent of artificial intelligence tools like ChatGPT.

Advanced 2-nanometre (2nm) chips perform better and are more energy-efficient than past types, and are structured differently to house even more of the key components known as transistors.

The new chip technology will help speed up laptops, reduce data centres' carbon footprint and allow self-driving cars to spot objects quicker, according to US computing giant IBM.

For artificial intelligence, "this benefits both consumer devices -- enabling faster, more capable on-device AI -- and data centre AI chips, which can run large models more efficiently", said Jan Frederik Slijkerman, senior sector strategist at Dutch bank ING.

LATEST

Many Killed In Blast At Swiss Bar Where Over 100 People Were

Air India Pilot Detained In Vancouver Over Alcohol Smell, Fl

Indian-Origin Zohran Mamdani Takes Oath As New York's First

Cigarette, Beedi, Pan Masala To Be Costlier From Feb 1 With

India Surpasses Japan to Become 4th Largest Economy. What's

Madhya Pradesh Minister's "Useless" Reply To NDTV Query, The

Sarfaraz Expresses Regret, Makes Blunt "Dreams Don't Come Tr

Sara Tendulkar Targetted Over Video In Goa, Gets Support On

Happy New Year 2026: 40 Heartfelt Wishes, Messages To Share

Spirit First Look: Bruised Prabhas, Intense Triptii Bring Ba

Rare 1997 Video Shows Indians Revealing Their New Year Resol

Watch: Times Square Ball Drop Rings In 2026 In New York City

Amitabh Bachchan Gets Emotional Remembering Dharmendra On KB

Many Killed In Blast At Swiss Bar Where Over 100 People Were

Ai India Pilot Detained In Vancouver Over Alcohol Smell, F

Idian-Origin Zohran Mamdani Takes Oath As New York's First

Cigarette, Beedi, Pan Masala To Be Costlier From Feb 1 With

India Surpasses Japan to Become 4th Largest Economy. What's

Madhya Pradesh Minister's "Useless" Reply To NDTV Query, The

Sarfaraz Expresses Regret, Makes Blunt "Dreams Don't Come Tr

Sara Tendulkar Targetted Over Video In Goa, Gets Support On

Happy New Year 2026: 40 Heartfelt Wishes, Messages To Share

Spirit First Look: Bruised Prabhas, Intense Triptii Bring Ba

Rare 1997 Video Shows Indians Revealing Their New Year Resol

Watch: Times Square Ball Drop Rings In 2026 In New York City

Amitabh Bachchan Gets Emotional Remembering Dharmendra On KB

Who makes them?

Producing 2nm chips, the most cutting-edge in the industry, is "extremely hard and expensive", requiring "advanced lithography machines, deep knowledge of the production process, and huge investments", Slijkerman told AFP.

Only a few companies are able to do it: TSMC, which dominates the chip manufacturing industry, as well as South Korea's Samsung and US firm Intel.

TSMC is in the lead, with the other two "still in the stage of improving yield" and lacking large-scale customers, said TrendForce analyst Joanne Chiao.

Japanese chipmaker Rapidus is also building a plant in northern Japan to make 2nm chips, with mass production slated for 2027.

What's the political impact?

TSMC's path to mass 2nm production has not always been smooth.

Taiwanese prosecutors charged three people in August with stealing trade secrets related to 2nm chips to help Tokyo Electron, a Japanese company that makes equipment for TSMC.

"This case involves critical national core technologies vital to Taiwan's industrial lifeline," the high prosecutors' office said at the time.

Geopolitical factors and trade wars are also at play.

Nikkei Asia reported this summer that TSMC, which counts Nvidia and Apple among its clients, will not use Chinese chipmaking equipment in its 2nm production lines to avoid disruption from potential US restrictions.

TSMC says they plan to speed up production of 2nm chips in the United States, currently targeted for "the end of the decade".

By Advik Gupta