TSMC 2nm Yields Surpass Expectations, Expands to STSP

TSMC has reportedly achieved stronger-than-expected yields in the trial production of its 2nm process technology, reinforcing its goal to begin mass production by 2025. The company has not provided new comments on this development as of December 5, but during its July earnings call, TSMC confirmed that the 2nm process is progressing smoothly. Both equipment performance and yield rates are reportedly on track or even surpassing expectations.

TSMC aims to begin 2nm mass production in 2025, with a production ramp-up curve expected to closely resemble that of its 3nm technology. The company anticipates that the number of tape-outs for 2nm products in the first two years will exceed those for 3nm and 5nm in their respective launch periods.

The demand for 2nm capacity has exceeded industry expectations, with strong interest from TSMC's client base, particularly from companies in the AI sector. This demand surge is expected to drive capital expenditure growth and may push TSMC to reach new investment highs. The company's plans to expand 2nm capacity are said to include potential upgrades at its Southern Taiwan Science Park (STSP) facility, allowing for additional capacity.

Apple has reportedly secured the first batch of 2nm production capacity, while other non-Apple clients, particularly in AI development, are also planning to adopt the new technology. Additionally, several AI startups have queued up to reserve 2nm production slots. It is expected that part of TSMC's 3nm production lines in the Southern Taiwan Science Park could be converted to 2nm capacity.

While TSMC typically does not disclose information about individual customers, its partner Synopsys recently revealed a collaboration with TSMC to accelerate innovation below the 2nm node. MediaTek is also among the first to adopt the technology.

TSMC's 2nm total production capacity plan includes four phases at its Hsinchu Science Park Baoshan facility and three phases at its Kaohsiung facility. If the STSP expansion plans come to fruition, TSMC could reach up to eight production phases across multiple fabs for 2nm capacity.

The first Baoshan fab is scheduled to have its equipment installed by April 2024, followed by the June launch of AI-accelerated risk trials using NVIDIA's cuLitho platform. The second Baoshan fab is expected to remain on schedule, while the Kaohsiung plant, initially planned for 2nm expansion, is already advancing six months ahead of schedule. If the STSP expansion is realized, 2nm production is set to ramp up further from the end of 2025 to 2026.

According to TSMC's 2nm roadmap, development is progressing smoothly. Key customers have completed their 2nm IP designs and are already in the validation phase. TSMC continues to enhance the 2nm process technology, focusing on low-resistance reset layers and ultra-high-performance inter-metal capacitance for further efficiency improvements.