Taiwan's TSMC, the world's largest foundry (contract chipmaker), is expected to lift its 3-nanometer (nm; one-billionth of a meter) process monthly capacity to 180,000 wafers by the end of this year. Orders for chips used in artificial intelligence (AI) and high-performance computing (HPC) are rising, expanding the scale of capacity additions beyond earlier expectations.
According to Taiwanese media reports on the 6th, TSMC's 3-nm plants in Taiwan are expected to reach a monthly capacity of 180,000 wafers by year-end. That is 20% higher than the 150,000 wafers the market initially expected. It is more than a 40% increase from 120,000–130,000 wafers per month at the end of last year.
TSMC is reportedly converting some 5-nm equipment in Taiwan for use in 3-nm production to expand 3-nm capacity. Because some production tools can be shared between 5 nm and 3 nm, capacity can be ramped faster than by building new fabs. Analysts say rising orders for AI accelerators and processors from Nvidia and AMD are driving the expansion.
Capacity for 2 nm is also projected to climb quickly. In the supply chain, TSMC's 2-nm monthly capacity is seen rising from 30,000–40,000 wafers at the end of last year to near 100,000 wafers by the end of this year. TSMC began volume production of 2 nm in the fourth quarter of last year and has said it will scale output rapidly this year.
The share of revenue from advanced nodes at TSMC is also increasing. In the second quarter, 3 nm accounted for 30% of total wafer revenue, while 2 nm, which only recently entered volume production, was 3%. The 5-nm share was 33%, bringing the combined share of 2, 3, and 5 nm to 66% of total wafer revenue.
3-nm production sites are expected to expand across Taiwan, the United States, and Japan. According to local reports, a new 3-nm fab in the Southern Taiwan Science Park is expected to start up in the first half of 2027, and the second plant in Arizona, United States, is slated for the second half of the same year. A second plant in Kumamoto, Japan, is also pursuing 3 nm, with volume production discussed for 2028.
To meet AI demand, TSMC raised this year's capital expenditure plan to $60 billion–$64 billion from $52 billion–$56 billion. The company plans to devote 70%–80% of total investment to advanced nodes. Chairman and CEO C.C. Wei said demand for AI Semiconductor chips is expected to remain strong through 2029–2030.