Taiwan Semiconductor Manufacturing Co. (TSMC), a major player in the semiconductor industry, has commenced production on its advanced 2-nanometer (2nm) process technology, marking a significant milestone in chipmaking innovation. This latest process introduces nanosheet transistors, known as gate-all-around (GAA) transistors, representing a new architectural progression beyond traditional transistor types.
Industry analysts highlight that TSMC's advancement with the 2nm node is likely to reinforce its leading position over competitors such as Samsung Electronics Co. Ltd. and Intel Corp. for several years to come. Early demand for 2nm chips is anticipated to come from an array of key customers, including prominent chip designers like Nvidia Corp., Apple Inc., Advanced Micro Devices, Inc., and Qualcomm Inc. In addition, major hyperscaler companies such as Microsoft Corp., Amazon.com Inc., and Alphabet Inc. (Google) are reported to be engaged, reflecting broad interest across multiple sectors in leveraging TSMC's latest technology.
According to Handel Jones, CEO of International Business Strategies, TSMC intends to primarily maintain the bulk of its advanced manufacturing capacity domestically in Taiwan. While a more limited 2nm production footprint is planned for the United States by 2028, the main technological advancements and output will remain concentrated in Taiwan. This strategy reflects TSMC's emphasis on sustaining its core manufacturing capabilities where expertise and infrastructure are strongest.
Dan Hutcheson, Vice Chair of TechInsights, notes that interest in TSMC's 2nm process is extensive, with reportedly over a dozen customers actively engaged in technology discussions and development efforts related to this node. This reflects TSMC’s broad appeal and the critical role its next-generation processes play in enabling more powerful and efficient semiconductor devices.
While competitors continue efforts to enhance their advanced-node processes, analysts emphasize that TSMC’s consistent delivery of production capacity and adherence to its technology roadmap remain significant differentiators. Handel Jones points out that the technological gap between TSMC and its nearest competitors appears to be expanding rather than narrowing, reinforcing the company’s dominant position.
Independent analyst Mike Demler acknowledges that Intel's 18A process offers a credible alternative capable of attracting some foundry customers as the process matures. However, he also remarks that TSMC’s 2nm technology is entering its GAA transition phase without backside power delivery in the initial iteration, yet the company can maintain and extend its advantage by implementing incremental enhancements across subsequent nodes and variants.
Paul Triolo of the DGA Group suggests that geopolitical considerations and supply chain assurances may present selective opportunities for competitors, especially when customers seek manufacturing diversity outside Taiwan, require redundancy, or desire different commercial arrangements. Nonetheless, overall, TSMC is expected to remain the dominant foundry in advanced semiconductor manufacturing.
Reflecting the company's robust outlook, several brokerage firms have recently raised their price targets for TSMC shares following a strong market performance at the start of 2026. For instance, JPMorgan analyst Gokul Hariharan increased his price target by 24 percent to 2,100 New Taiwanese dollars, citing strong demand for advanced manufacturing capabilities and the company’s ability to command pricing power.
TSMC is scheduled to report its financial results for the December quarter in the upcoming week. Market analysts surveyed by Bloomberg anticipate year-over-year sales growth of approximately 18 percent and an operating margin exceeding 50 percent, which would represent the highest profitability level in three years.
In premarket trading on Thursday, TSMC shares rose by 1.33 percent, reaching $322.92, approaching their 52-week high of $333.08. This performance underscores investor confidence in the company’s growth trajectory supported by its technological advancements and solid customer demand.