The Taiwanese-based biz is looking to secure its share of this sector by ramping production of 2nm chips this year, and pledged volume production of cutting-edge 1.6nm chips for next year.

TSMC seems to have a spring back in its step following the global fall in demand for silicon during 2023. Today it reported [PDF] calendar Q4 revenue of $26.88 billion, up 37 percent year-on-year.

For Q1 of 2025, TSMC is forecasting a sequential decline in revenue, due to "smartphone seasonality." If accurate, this would see the world's largest chip maker bring in between $25 billion and $25.8 billion, a 5.5 percent drop over today's results, but up 34.7 percent over the same period last year.

However, judging by the capex projections for this financial year, TSMC seems to be in confident mood. It is planning to spend up to $42 billion, compared to $29.8 billion in 2024.

Speaking on an analyst conference call to discuss the results, vice chairman and CEO C.C. Wei claimed: "We expect 2025 to be another strong growth year for TSMC, and forecast our full year revenue to increase by close to mid-20s percent in US dollar terms."

The past year saw "robust AI-related demand," from AI accelerators including GPUs, ASICs and HBM controllers for training and inference in the datacenter, according to Wei, and he forecast this would double in 2025, as a strong surge in demand continues.

"We expect AI accelerators to be the strongest driver of our HPC platform growth and the largest contributor in terms of our overall incremental revenue growth in the next several years," he said.

TSMC's N2 (2nm) process node is "well on track" for volume production in the second half of 2025, as scheduled, Wei said. This is expected to offer a 10 to 15 percent speed improvement at the same power versus N3E technology, or a 20 to 30 percent power improvement at the same speed, and an increase of more than 15 percent in density.

He also mentioned TSMC's A16 technology, which is scheduled to produce the first 1.6nm chips by 2026. This will be available with Super Power Rail, TSMC's version of the backside power delivery approach detailed by Intel, and the node is to feature a further 8 to 10 percent speed improvement at the same power compared with N2, and an additional 7 to 10 chip density gain.

"Volume production is scheduled for second half 2026," Wei claimed.

On the company's fabrication plant projects, the first fab in Arizona entered high-volume production last quarter, using N4 (4nm) process technology with a yield comparable to TSMC's fabs in Taiwan.

Plans for a second and third fab in Arizona are also on track, with those facilities intended to operate more advanced technologies such as N3, N2, and A16 (3nm, 2nm and 1.6nm) "based on our customers' needs," Wei said.

In Japan, a "specialty technology" fab in Kumamoto started volume production at the end of 2024, while construction of a second is scheduled to begin this year. And plans for TSMC's first fab in Europe continue, with commitment from the European Commission and German federal, state and city government for the site in Dresden intended to produce automotive and industrial chips.

For the fourth quarter, 5nm chips still made up the bulk of TSMC's revenue (43 percent), but 3nm caught up fast at 26 percent, while 7nm is now down slightly to 14 percent. In terms of platforms, products for the high performance compute (HPC) sector dominated at 53 percent of revenue, with smartphone chips making up 35 percent.

By: DocMemory
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