Taiwanese govt clears TSMC to make 2nm chips abroad — country lowers its 'Silicon Shield'
But does TSMC plan to?

TSMC is now permitted to build chips on its upcoming 2nm-class process technologies at its facilities outside of Taiwan, according to J.W. Kuo, Minister of Economic Affairs of Taiwan, who said at a government press conference, reports Taipei Times. Previously, TSMC was prohibited from making chips using its latest process technologies outside Taiwan, largely to preserve the country's 'Silicon Shield,' a strategy that aims to keep production of the most leading-edge process nodes in Taiwan to ensure allied nations will defend the country in the event of a Chinese attack. However, while TSMC can formally export its N2-series process to the U.S., its only currently planned 2nm-capable fab will only come online by the decade's end.
"Those were old-time rules. Times have changed," Kuo said at the conference, according to Taipei Times. "Private businesses should make their own business decisions based on their own technological progress. The basic principle is that businesses can make profits from their overseas investments. TSMC is building factories in the U.S. with the aim of serving its U.S. customers, as 60% of the world's chip-designing companies are based in the U.S."
TSMC previously faced restrictions preventing Taiwanese companies from using leading-edge technology in overseas facilities. These rules required overseas chip production to lag at least two generations behind domestic operations. However, Taiwan's government has updated its stance, allowing businesses to decide based on technological advancements and market opportunities.
Right now, TSMC produces chips on its N4-series (4nm-class) technologies at its Fab 21 phase 1 in Arizona. The company's next module — Fab 21 phase 2 — is expected to be capable of making chips on its 3nm-class fabrication processes and is set to come online in 2028. Theoretically, TSMC could install more advanced tools and make Fab 21 phase 2 capable of making semiconductors on its N2-series production nodes. However, under the current roadmap, TSMC's A16 and N2 fabrication technologies are set to be used at Fab 21 phase 3 by the end of the decade. The total investment in Arizona is expected to exceed $65 billion.
Whether TSMC will export its 2nm-class manufacturing process to its U.S. facilities remains to be seen. The company will have at least two sites capable of making 2nm chips in Taiwan in 2025 – 2026. It is reasonable to assume that the company will have enough capacity for its N2, N2P, N2X, and A16 fabrication processes in the next few years.
Minister Kuo also addressed concerns about potential shifts in U.S. trade policies under Donald Trump. Kuo highlighted Taiwan's strong technological capabilities and said he expected minimal impact on Taiwanese exporters, who are gaining from the U.S.-China trade war. Many Taiwanese manufacturers are replacing Chinese suppliers for U.S. companies and increasing production in Taiwan. He downplayed the long-term impact of Trump's possible policies, noting that his presidency is limited to four years, which reduces his potential influence on the global trade.
Stay On the Cutting Edge: Get the Tom's Hardware Newsletter
Get Tom's Hardware's best news and in-depth reviews, straight to your inbox.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
-
Eximo I did think it was odd they wouldn't want to maximize production. Probably pressure from their customers.Reply -
-Fran- There's a few things, at a high level, I can get from this, but it's more tinfoil hat territory.Reply
Still, good they allowed this, since TSMC will still get the revenue and pay their taxes accordingly in Taiwan I'm sure.
Regards. -
joeer77 Smart move TSMC. No one protects IP more than the USA! US based equipment suppliers will also be beneficial to getting your fab up and supported quickly.Reply -
8086 This is the best thing Taiwan can do for their own security: because keeping their best processes on the homeland makes them a bigger, more desirable, and juicy target for the mainland chicoms. Now that their best will be produced in the West, it must be giving the communists some second thoughts on their goals and strategies.Reply -
bit_user
LOL, because their N2 export plans are slated for a point in time when Taiwanese fabs will be well beyond. It seems to me they're retaining the same strategy, just adjusting the thresholds a bit.8086 said:This is the best thing Taiwan can do for their own security: because keeping their best processes on the homeland makes them a bigger, more desirable, and juicy target
On your point, whether or not they have an exclusive lock on the latest node probably doesn't move the needle as far as them being a target. They were a target before all of the semiconductor fab sanctions came into being. It's not primarily about that.
Finally, Japan's Rapidus and Intel/Samsung are moving rapidly to compete. Intel could have a N2-comparable node already ramped up this year. Not sure about Samsung's timelines. Rapidus is making... rapid progress. Sounds like they'll be soon to follow, but we'll see. -
staticks I love how Washington DC is basically stealing TSMC and Taiwanese technological IP away from Taiwan, under the thinly veiled pretense of "protecting them." What happened to TSMC being Taiwan's "silicon shield" against foreign invasion? The Taiwanese people, or at least their corrupt government officials, must be the biggest suckers on the planet.Reply -
bit_user
They're not. The IP stays in TSMC, even if the factory is located on US soil. IP theft, in the USA, is punishable by US law.staticks said:I love how Washington DC is basically stealing TSMC and Taiwanese technological IP away from Taiwan,
Plus, don't you think the way the fab machines are programmed is closely guarded? Sure, people working there can observe certain external details about their process, like the amounts of different chemicals & materials used, but I'm sure they're not privy to the fine details of the fabrication process. They're factory workers, don't forget. They mostly just do care & feeding of the machines.
BTW, the machines, themselves, are made by ASML and used by everyone at the cutting edge (except for a couple Japanese fabs). Certain details of how they work and the high-level details of EUV nodes are going to be the same for everyone. -
Joseph_138 They should move all their tooling for processes more advanced than what China and Russia are capable of producing to a safer country, that way, if China does invade, they won't be getting technology any better than what they already have. NVIDIA and AMD could also produce their A.I. products far away from China. If China invades Taiwan, NVIDIA and AMD are basically done, because where else are they going to produce their GPU's, if not at TSMC's fabs? Samsung? South Korea is hardly safer than Taiwan, if China decides to send their military forces out to seize more advanced technologies from it's weaker neighbors.Reply -
Joseph_138
You would rather China and Russia get the tech?staticks said:I love how Washington DC is basically stealing TSMC and Taiwanese technological IP away from Taiwan, under the thinly veiled pretense of "protecting them." What happened to TSMC being Taiwan's "silicon shield" against foreign invasion? The Taiwanese people, or at least their corrupt government officials, must be the biggest suckers on the planet.