Samsung Electronics poised to surpass TSMC in 2nm chip production

With Taiwan Semiconductor Manufacturing Co. (TSMC) reportedly delaying its planned mass production of 2 nanometer (nm) chips, rival Samsung Electronics Co. will likely get a chance to get ahead by being the first to produce the next generation chips, following the South Korean chipmaker’s achievement of becoming the world’s first producer of 3 nm chips.

According to industry forecasts, the Korean company is expected to significantly raise its market share in the global foundry with a competitive edge in advanced processes in 2024, a moment when the industry expects recovery to begin.

Taiwanese media and other sources said Sunday that TSMC is projected to complete its ongoing construction of a 2nm plant in Baoshan, Taiwan, by the second quarter of 2025. According to media reports, the Taiwanese chipmaker will start mass production of 2nm chips, with a monthly volume of 30,000 wafers, as early as the fourth quarter of that year.

TSMC had ramped up its effort in developing next-generation processes so rapidly that it was expected to begin production of pilot 2nm chips earlier than the original plan, with some projecting that the company would begin mass production in early 2025.

But these expectations have recently subsided as the Taiwanese chipmaker’s Baoshan plant construction has been slow, as the company adjusts supply to match demand forecasts. The delayed plan has made it difficult for the chipmaker to launch 2nm chips within the planned timeframe, according to industry insiders.

Some sources said that TSMC has faced challenges in developing GAA (Gate-All-Around), a next-generation technology with a higher efficiency of electricity usage compared to the conventional FinFET process.

Samsung Electronics has been successful at applying the GAA technology to its 3nm manufacturing process to date, with an estimated yield rate of over 60 percent. The Korean chipmaker has also been developing second-generation 3nm chips by tapping its technical expertise in the first-generation products. By using its all knowhow, the company plans to begin production of 2nm chips in 2025 and 1.4 nm in 2027.

The next generation 2nm will be a game changer in the global foundry industry. “The demand for 3nm has sagged in the face of global economic slowdowns, and the markets expected a rapid jump for the industry in 2025, when a peak demand is forecast,” an unnamed source from the chip industry said.