TSMC accelerates 2 nm chip production and U.S. expansion as the global race for next-gen AI processors heats up

TSMC is rolling up its sleeves in the global race for semiconductors. The microchip producer has announced that volume production of its 2nm process (codenamed N2) is happening earlier than planned.

TSMC will start producing its N2 node in 2025, with a ramp-up expected in 2026, bringing the timetable forward several years from 2030. The company executives have reported promising early yields. Work has already started on an improved variant (N2P) scheduled for release in late 2026.

The expedited timeline is coming after TSMC reported a bumper Q3 2025. The semiconductor manufacturer recorded a $33.1 billion revenue, over 40 percent increment compared to the same period last year. TSMC rode on the coattails of AI and premium smartphones to unprecedented success on significant orders from customers such as Nvidia and Apple.

Spending will also be heavily focused on expanding manufacturing capacity both locally and outside Taiwan, with $42 billion earmarked for that purpose in 2025.

TSMC also provided an update on its Arizona manufacturing site. The complex is being upgraded from 3 nm and 4 nm to 2 nm infrastructure. It will also be positioned to handle future A16-class production. The contract chipmaker says the plant could join the ranks of the most advanced semiconductor hubs outside of Asia with a projected 30 percent share of TSMC’s next-gen output.

TSMC plans to churn out about 100,000 wafers a month from Arizona. It will build out the required packaging, testing, and supplier infrastructure and is currently looking into additional land acquisitions. The expansion cannot be better timed as the United States pushes for domestic chip production and reduced reliance on foreign foundries.

The stakes remain high in the global AI and national security tango, but TSMC is positioning itself to be the top dog in the battle for the next generation of semiconductors for advanced computing.