TSMC is drastically increasing its expenditures to get its cutting-edge 1.6nm chips into ‘volume production’ by 2026, with big revenue increases expected.
Taiwan Semiconductor Manufacturing Company (TSMC) has announced plans to begin volume production of its advanced 1.6nm chips by 2026, following its 2nm node launch in late 2025. The company anticipates 8-10% speed gains and 7-10% density improvements with the 1.6nm chips over 2nm, all while maintaining power efficiency. To achieve this, TSMC is increasing expenditures to $42 billion in 2025, reflecting confidence in continued revenue growth, projected to rise by 20% 2025. Citi Research analyst Laura Chen notes that TSMC is expected to experience significant revenue growth through 2026, fueled by increasing demand from cloud and edge AI applications. Despite current headwinds like smartphone seasonality, TSMC remains optimistic, with Q4 2024 revenue reaching $27 billion, a 37% year-on-year increase.
My Take
TSMC’s aggressive roadmap reflects the accelerating pace of semiconductor innovation and the growing demand for advanced nodes to drive AI and edge computing breakthroughs. As these technologies scale, maintaining robust talent pipelines and supply chain resilience will be critical for sustained success.
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