AI Demand Drives TSMC to Accelerate Capacity Expansion: Five 2nm Fabs to Ramp Up This Year, Wafer Capacity Expected to Reach 120,000 by Year-End

Major Customers Boost Capacity Booking, 2nm Capacity Expansion Outpaces Expectation

According to media reports, major players including Apple, NVIDIA, AMD, Qualcomm, and MediaTek, aiming to capture AI and high-performance computing opportunities, have reportedly increased their booking for TSMC's 2nm family capacity by 10% to 20%. In response, TSMC is accelerating the expansion of its 2nm capacity, with progress exceeding expectation.

The market initially projected TSMC's 2nm monthly capacity to reach roughly 90,000–100,000 wafers by the end of this year, with double-digit growth to 110,000–140,000 wafers expected in 2027. However, industry sources indicate that driven by strong follow-on orders from customers, TSMC is speeding up its 2nm capacity buildout, targeting 120,000 wafers per month by year-end. It means the target originally set for 2027 will be achieved ahead of schedule. When asked for comment, TSMC stated that it does not comment on customer information or market rumors.

Five Fabs Ramping Up Simultaneously, 2nm Wafer First-Year Output to Rise 45% vs. 3nm

TSMC Senior Vice President and Deputy Co-COO Cliff Hou previously noted that fueled by robust AI-driven demand, five 2nm fabs will ramp up concurrently for the first time this year — two in Hsinchu and three in Kaohsiung.

He also disclosed that TSMC's wafer output in the first year of 2nm production will be 45% higher than the first-year wafer output of 3nm in 2023. 2nm capacity will register a compound annual growth rate (CAGR) of 70% from 2026 to 2028. TSMC will also continue scaling up 3nm capacity, with 3nm capacity projected to deliver a CAGR of approximately 25% between 2022 and 2027.

Strong Demand for Advanced Node, Parallel Expansion of 3nm and Global Capacity

TSMC is concurrently accelerating its global capacity expansion initiative by adding three new 3nm wafer fabs located in Taiwan, China, Arizona, the United States and Japan, to meet robust long-term demand for the 3nm process technology. Separately, TSMC continues to re-purpose 5nm equipments in Taiwan, China, to support 3nm capacity. The second fab at U.S. site will adopt the 3nm process technology. Construction of this fab has been completed, and volume production is scheduled to begin in the second half of 2027.