Taiwan’s semiconductor powerhouse TSMC has begun large-scale production of its highly anticipated 2-nanometre (2nm) chips, marking a major breakthrough in the global chip industry, according to a company statement reviewed by AFP.
As the world’s largest contract chipmaker, TSMC supplies critical components used across industries from smartphones and high-performance computing to defence systems with major clients including Apple and Nvidia.
The company confirmed that its 2nm (N2) technology entered volume production in the fourth quarter of 2025, staying on track with its roadmap.
TSMC described the new chips as the most advanced semiconductors ever produced, setting new benchmarks in chip density and energy efficiency.
Built on a next-generation nanosheet transistor architecture, the N2 technology delivers major gains in performance while significantly reducing power consumption an essential leap as demand for AI-driven and energy-efficient computing accelerates worldwide.
Production will take place at TSMC’s flagship facilities: Fab 20 in Hsinchu in northern Taiwan and Fab 22 in Kaohsiung in the south.
Taiwan currently manufactures more than half of the world’s semiconductors, including nearly all of the most advanced chips powering artificial intelligence.
The launch comes amid an unprecedented surge in AI investment. Tech companies are pouring billions into chips, servers, and data centres, with global AI spending projected to reach $1.5 trillion in 2025 and exceed $2 trillion in 2026, nearly two percent of global GDP, according to Gartner.
Beyond technology, TSMC’s dominance carries deep geopolitical significance. Taiwan’s control over advanced chip production has long been described as a “silicon shield”, deterring aggression and reinforcing international interest in the island’s security.
However, rising tensions with China, which claims Taiwan as its territory, have heightened fears of potential supply-chain disruptions.
Those concerns intensified this week as Chinese fighter jets and warships conducted live-fire drills around Taiwan, simulating a blockade of key ports. Taipei condemned the exercises as provocative, insisting they failed to isolate the island.
In response to global demand and geopolitical risks, TSMC has expanded its footprint abroad, investing heavily in fabrication plants in the United States, Japan, and Germany. Still, Taiwanese officials remain firm that the most advanced chipmaking will stay on home soil.
Earlier this month, Deputy Foreign Minister Francois Chih-chung Wu said Taiwan aims to remain “indispensable” to the global semiconductor industry, underscoring TSMC’s central role in powering the world’s digital and AI-driven future.
