Taiwan Greenlights TSMC's 2nm Fab: Coming Online in 2024 ~ 2025

Taiwanese Environmental Review Committee has approved TSMC's plan to build a new fab at the company’s site near Baoshan, Hsinchu County, Taiwan. The fab will produce chips using TSMC's N2 (2 nm) manufacturing process and will be one of the most advanced semiconductor facilities in the world when it goes online several years from now.

"Semiconductor is one of the most crucial industries to Taiwan's economic growth," said Lin Chuan-nen, Economics Vice Minister, reports Nikkei. "The government will help TSMC to achieve its environmental targets while continuing to build the advanced technologies."

TSMC's first N2-capable fab located in the Hsinchu Science Park is expected to be built in four phases. TSMC expects to break ground for the construction of its new '2nm' production facility in early 2022, according to Nikkei. Typically, it takes semiconductor companies about a year to construct a building and then start the equipment move in process, which takes another year or so.

Based on the company's roadmap, its N2 fabrication process will be ready for mass production in late 2024 or sometime in 2025, which is when the fab will be ready. As demand for TSMC's N2 node increases, TSMC will construct, equip, and ramp up additional phases of its facility in Hsinchu.

Actual production capacity of the whole fab is unknown, but typically TSMC strives to build its so-called GigaFabs, facilities with a production capacity of over 100,000 wafer starts per month. To meet demand for its N2 node, TSMC is considering building an additional leading-edge production facility at another site.

TSMC's N2 will be the foundry's first manufacturing process to use gate-all-around (GAA) transistors (in their nanosheet or nanowire implementation), along with other innovations. TSMC did not disclose any details about the technology at its most recent technology symposium, which is an indicator that the technology is either still in pathfinding mode, or several versions of the node are being evaluated.

TSMC recently started construction on its N5-capable (5 nm) fab in Arizona. While this facility will not use the company's most advanced node when it goes online in 2024, it will be TSMC's first overseas fab in years that will produce chips using an advanced fabrication process. TSMC is also considering building fabs in Japan and Europe to meet the demand of local customers, but these facilities will mostly focus on specialty technologies.

Previously, all of TSMC's advanced facilities were only built in Taiwan, whereas fabs in the U.S. and China used considerably older nodes. This obviously helped to ensure the geopolitical importance of Taiwan. But while TSMC is somewhat altering its fab strategy, its leading-edge facilities will still be built in Taiwan, and authorities there are willing to help the world's largest contract maker of semiconductors.

"It is OK for TSMC to expand its overseas footprint, but from a geopolitical perspective it is very important for Taiwan to have TSMC building its most advanced technology [domestically]," a government source told Nikkei Asia. "We can't hinder TSMC's plans to stay ahead of the competition."