TSMC (Taiwan Semiconductor Manufacturing Company), the world's largest foundry (contract chipmaker), is estimated to reach a monthly production of 180,000 wafers on its 3-nanometer process by the fourth quarter of this year.

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Inside a TSMC plant in Hsinchu, Taiwan. Production is surging amid explosive demand. / United Daily News (Taiwan)

According to Beijing sources familiar with Taiwan's economic affairs on the 6th, TSMC's strong production outlook appears to be driven by robust order demand from key customers such as Nvidia, AMD, and Broadcom. TSMC is naturally expected to accelerate plant construction to keep up with this demand.

Indeed, in response to strong demand from AI and high-performance computing (HPC), TSMC has begun converting some of its 5-nanometer equipment lines to 3-nanometer to expand mass production at the smaller node. The sources predicted this effort would pull forward the timeline for reaching 180,000 wafers per month at 3nm by two to three months, accelerating shipment momentum for the process.

At the same time, the sources projected that once TSMC's 3nm plants under construction in Taiwan's Southern Taiwan Science Park, Arizona in the U.S., and Kumamoto, Japan begin mass production — in the first half of next year, the second half of next year, and 2028, respectively — combined monthly output could reach 220,000 to 250,000 wafers.

The sources also forecast that TSMC's 2nm monthly production, currently around 50,000-60,000 wafers in the first half of this year, would rise to 80,000 wafers by early in the fourth quarter, reaching 100,000 by year-end and 180,000 by 2028. As a result, combined monthly production of 2nm and 3nm chips is expected to reach 250,000 wafers by the end of this year, and surpass 400,000 wafers a month by 2028.

Earlier, at its second-quarter earnings call in mid-July, TSMC said demand for AI chips using advanced processes remains very strong, with demand from major customers and cloud service providers continuing to grow. The company also said it already has order visibility extending from 2029 through 2030.

TSMC also raised its annual capital expenditure forecast — a key indicator of management's confidence in the sustainability of AI demand — from the previous range in the $50 billion range to $60-64 billion (88.7-94.6 trillion won). TSMC's advance shows no sign of slowing down.

                                                                                                         Hong Soon-do