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Industry rumors quoted by the Taiwanese press suggest that it was payday this December for TSMC’s research and development teams. TSMC is one of the most advanced chip manufacturing companies in the world, and over the years, it has gained strong footholds in the market for Arm-based microprocessors. At the same time, it has also demonstrated the ability to keep up with and outpace U.S. chip manufacturer Intel Corporation when making the chips with the smallest feature sizes.
Today’s unofficial reports share that TSMC is on track to start mass-producing leading-edge 2-nanometer chips in 2025. In fact, the tail end of 2023 has seen market chatter grow and move away from TSMC’s ‘N’ lineup of products to the ‘A’ lineup. Like Intel, TSMC will also use the A affix to designate advanced processes.
TSMC’s R&D Bonuses Range From NT$6,000 To NT$100,000 Suggest Rumors
At the close of trading earlier today in Taiwan, TSMC’s market capitalization on the Taipei Exchange was NT$15.38 trillion. In U.S. dollar terms, TSMC is the most valuable company in Taiwan by several factors, and the recent optimism about artificial intelligence has only further aided the company’s rise.
TSMC’s American Depository Receipts (ADRs) have a market capitalization of $497 billion – more than twice the value of Intel. However, Intel’s shares have rallied 88% year to date, so perhaps it is on the cusp of making a turnaround under its chief, Patrick Gelsinger.
While TSMC refused to confirm that any bonuses have been paid for the successful development of advanced process technologies of both the N and A families, industry reports quoted by the Taiwanese press share that there is firm progress on advanced chip manufacturing nodes such as A10 and A14.
In chip manufacturing process naming, a nanometer or ‘nm’ refers to the size of a transistor’s dimension. Also called feature width, the smaller this value is, the better it is for overall processing power and power efficiency.
However, since it becomes progressively difficult to shrink transistor dimensions further, manufacturers such as TSMC and Intel see fewer gains over time. As a result, they are adopting new names for their process technology families. Intel’s post-3-nm processes are called 20A and 18A, and a slide shared by TSMC’s management in December indicated that its post-2-nm node will be called A14.
Hot speculation in Taiwan suggests that TSMC remains on track to complete trial production of 2-nm products, making it ready to be implemented in a brand new 2-nm manufacturing plant built in the island’s Hsinchu city. Statements from management have shared that 2-nm should be ready to be introduced to customers in 2025 and enter mass production in 2026.
The purported bonuses come as TSMC exits 2023 after dealing the full blow of a downturn in the semiconductor industry. Record high inflation, supply chain bottlenecks and a tighter credit environment have made it difficult for high-growth technology companies to meet consumer spending immediately following the coronavirus pandemic.
Chipmakers such as NVIDIA, AMD and Intel were struggling to post healthy income statements before the surge in talk about A.I. products. For instance, NVIDIA’s revenue for the quarter ending in October 2022 marked a 17% annual drop, while its net income dropped by 72%. Similarly, TSMC’s monthly revenue has fallen annually for eight out of the 11 months in 2023. If it had not been for October, then November would have seen the firm mark a negative growth for eight consecutive months starting in March.