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The world’s leading semiconductor companies are racing to make so-called “2 nanometer” processor chips that will power the next generation of smartphones, data centers, and artificial intelligence.
Taiwan Semiconductor Manufacturing Company remains the analysts’ favorite to maintain its global supremacy in the sector, but Samsung Electronics and Intel have identified the industry’s next leap forward as a chance to close the gap.
For decades, chipmakers have sought to make ever more compact products. The smaller the transistors on a chip, the lower the energy consumption and the higher their speed. Today, terms such as “2 nanometer” and “3 nanometer” are widely used as shorthand for each new generation of chip, rather than a semiconductor’s actual physical dimensions.
Any company that opens up a technological lead in the next generation of advanced semiconductors will be well placed to dominate an industry that pulled in well over $500 billion in global chip sales last year. That is projected to grow further due to a surge in demand for the data center chips that power generative AI services.
TSMC, which dominates the global market in processors, has already shown the process test results for its “N2”—or 2 nanometer—prototypes to some of its biggest customers, including Apple and Nvidia, according to two people with direct knowledge of the discussions.
But two people close to Samsung said the Korean chipmaker was offering cut-price versions of its latest 2 nanometer prototypes in an effort to attract the interest of big-name customers including Nvidia.
“Samsung sees 2 nanometer as a game-changer,” said James Lim, analyst at US hedge fund Dalton Investments. “But people are still doubtful it can execute the migration better than TSMC.”
Financial Times
Former market leader Intel has also made bold claims about producing its next generation of chips by the end of next year. That could put it back ahead of its Asian rivals, though doubts remain about the performance of the US company’s products.
TSMC, which has said that mass production of N2 chips will begin in 2025, typically launches the mobile version first, with Apple as its lead customer. Versions for PC and then high-performance computing chips designed for higher power loads will come later.
Apple’s latest flagship smartphones, the iPhone 15 Pro and Pro Max, were the first mass-market consumer devices to deploy TSMC’s new 3 nanometer chip technology when they were introduced in September this year.
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