TSMC 3nm and 5nm Capacity Utilization to Hit 100%

According to Taiwanese media reports, TSMC's 3nm and 5nm production lines remain fully loaded, with utilization rates expected to approach nearly 100% in the first half of next year. Demand for the 3nm process is particularly strong, driven by orders from major players such as Qualcomm, Apple, and MediaTek in smartphones, as well as NVIDIA's upcoming Rubin GPU in the high-performance computing (HPC) sector. Market demand has already exceeded expectations.

Next-generation flagship smartphone processors are set to intensify competition, with Apple's A19 series, Qualcomm’s Snapdragon 8 Gen 5 Extreme Edition, and MediaTek's Dimensity 9500 all built on TSMC’s N3P process. On the PC side, chips like Apple's M5, Qualcomm's Snapdragon X2 Elite, and X2 Elite Extreme will also adopt the 3nm node. In HPC, NVIDIA's Rubin GPU, AMD’s MI355X, and Amazon's AWS Trainium3 are expected to enter mass production early next year. Analysts believe 3nm will be a key growth driver for TSMC's revenue in 2025.

Industry sources add that advanced processes below 5nm are becoming scarce resources, with multiple tech giants racing to secure capacity. As a result, TSMC's 5nm production is also forecast to run near full capacity in the first half of next year. This strong demand may give TSMC leverage to raise prices and offset margin pressure from overseas expansion.

Meanwhile, TSMC announced on September 25 that VP Jhuang Rui-Ping will take over management of its U.S. fab from Wang Ying-Lang, who will return to headquarters as operations head on October 1. Market watchers believe this leadership change signals accelerated progress at TSMC's U.S. fab and early preparations for its advanced packaging facility scheduled for the second half of next year.

With advanced packaging capacity in short supply, TSMC is also scaling up rapidly. Industry estimates show its total CoWoS output will reach 650,000 wafers this year and exceed one million next year. Taiwanese equipment makers such as GPM, Gudeng, and Marketech are among the key beneficiaries, with Gudeng also expanding adoption of its Diffuser FOUPs. Penetration rates are projected to surpass 20% as more advanced packaging carriers are introduced.

To further enhance efficiency, TSMC is working on square carriers under its CoPoS advanced packaging initiative. Trial production lines are expected to be established in the second quarter of 2026, with mass production targeted for 2028.