2nm project in Hsinchu's Baoshan on schedule: TSMC

Taipei, Sept. 19 (CNA) Taiwan Semiconductor Manufacturing Co. (TSMC) said on Tuesday that its project to build an advanced wafer fab in Hsinchu's Baoshan Township, which will use the next-generation 2-nanometer process, is on schedule.

In a statement, the world's largest contract chipmaker said the new 2nm wafer fab project in Baoshan, a section of the Hsinchu Science Park, is on schedule, contrary to local media reports that said the start date of mass production in the plant had been put back to 2026 from 2025 because of weakening demand from end-users.

The reports said TSMC's 2nm process project had been affected by the slowdown in the global semiconductor industry and that the company was uncertain about how clients would adopt the new technology.

The 2nm process is the next generation after the 3nm process, the latest technology TSMC began using in commercial production at the end of last year. Apple Inc. is believed to be the first 3nm process client, with the new iPhone 15 Pro models powered by the A17 Pro GPU which uses TSMC technology.

The chipmaker has intensified efforts in developing advanced processes to maintain its technological lead over its peers and cement its No. 1 status. After the 2nm process, TSMC aims to develop the more sophisticated 1.4nm technology.

In addition to Baoshan, TSMC also plans to roll out chips made using the 2nm process from plants in Taichung and Kaohsiung.

According to a TSMC plan, the Baoshan 2nm plant will begin mass production in 2025 and there are also plans to unveil an upgraded version of the 2nm technology, especially for the use of high-performance computing applications, in the second half of 2025, with commercial production slated for 2026.

TSMC has had to deal with market speculation regarding the postponement of new technology development and overseas investment amid concerns about global demand.

Last week, Reuters cited unnamed sources as saying TSMC had told major suppliers to delay the delivery of high-end production equipment due to it being "increasingly nervous about customer demand."

The Reuters report said the instruction by TSMC to its suppliers aimed to control costs and also reflected the chipmaker's caution about demand outlook.

TSMC declined to comment on the Reuters report but quoted C.C. Wei (魏哲家), CEO of the company, as saying at an investor conference held in mid-July that despite increasing demand for artificial intelligence applications, a cyclical slowdown in the semiconductor industry was expected to continue into the third quarter.

However, Wei said, TSMC's 3nm process is expected, to some extent, to offset the impact resulting from inventory adjustments in the global semiconductor industry.

Due to the global economic weakness, lingering fragile demand from end-users, and a slower-than-expected recovery in China, Wei said its clients have turned more cautious and are planning to step up further inventory control into the fourth quarter.

Under such circumstances, Wei said TSMC predicted its sales would fall about 10 percent from a year earlier in 2023 in U.S. dollar terms, more than the previous estimate made in April of a 4-6 percent decline.