TSMC Kickstarts Mass Production of the World’s Most Advanced 2nm Chips
On 31 December 2025, Taiwan Semiconductor Manufacturing Company (TSMC) announced that it is ready to mass produced the world’s most advanced 2nm chip, aka #N2Tech, at its fab in Taiwan. The announcement comes on the heels of a large-scale military drill by China’s People’s Liberation Army, which simulated an encirclement of Taiwan to blockade its ports and prevent outside interference.
TSMC makes most of the advanced chips that power modern electronics for civil and military applications. TSMC alone commands more than half of the global market share for semiconductors and nearly 100% of the most advanced chips used in #AI applications such as the Nvidia #GPU.
The global market for AI is booming at the moment. According to the Gartner research firm, the AI-related spending will increase from USD 1.5 trillion in 2025 to USD 2 trillion in 2026.
The leadership and dominant position of Taiwan affords it what some analysts refer to as the ‘Silicon Shield’, by securing the firm support of the USA and protecting it from a forced reunification by China.
To diversify its production base and to be closer to its customers, TSMC has invested in fabs around the world in the United States, China, Japan, and Germany. However, as a company policy, the most advanced chips are made in Taiwan. Taiwanese Deputy Foreign Minister Francois Wu underlined that Taiwan will keep on home soil the production of the most advanced chips, which are indispensable to the global semiconductor industry.
In related news, the US Commerce Department eased the export procedures of certain US export-controlled items to be supplied to TSMC in Nanjing, China, without the need for individual licenses. The restrictions were in place as part of the US’s efforts to stay ahead of China in semiconductor technology.
Industry analysts note that South Korea’s Samsung and Japan’s Rapidus are all racing to upgrade from the 2nm to the 3nm process. In the meantime, TSMC is already pushing ahead with the next-generation chips at 1nm to maintain its lead.