TSMC: N2 well on track for volume production in H2 2025

TSMC: N2 well on track for volume production in H2 2025

Taiwan Semiconductor Manufacturing Company (TSMC) is making significant strides in its advanced semiconductor technology, with the N2 process node well on track for volume production in the second half of 2025. The company's 2nm (N2) technology, developed in collaboration with leading ecosystem partners, is poised to revolutionize the semiconductor industry by offering superior performance and energy efficiency.

The N2 process node, also known as TSMC 2nm, is a critical milestone for TSMC, promising to deliver 100% support from the ecosystem, as highlighted by industry experts [1]. This technology leverages GAA (Gate-All-Around) nanosheet architecture, providing substantial improvements in transistor density and power efficiency compared to older nodes. The 2nm node is expected to contribute significantly to the company's revenue, particularly in the AI and high-performance computing (HPC) sectors.

TSMC's Q2 earnings report, released in July 2025, underscored the company's strong performance and growth trajectory. The report showed a 40% year-over-year increase in revenue, reaching $60.8 billion, driven primarily by the demand for AI chips [2]. The company's CEO, C.C. Wei, noted that AI-related demand remains very strong and consistently outpacing supply. This robust demand for advanced nodes, including the 2nm N2 technology, is expected to continue, further solidifying TSMC's position in the market.

Analysts and brokers have expressed cautious optimism about TSMC's Q3 and full-year revenue outlook. While some expect a slight decline in Q3 revenue due to currency headwinds and other factors, the majority anticipate significant growth in 2025, with projections ranging from 25% to 30% year-over-year [3]. This growth is driven by the company's ability to scale capacity and meet the increasing demand for advanced nodes.

TSMC's N2 node is expected to contribute to this growth by offering substantial performance gains and margin expansion. The 2nm technology promises a 15% performance improvement and 30% power efficiency gain over the 5nm node, making it ideal for training large language models and powering data centers [2]. The company's ability to convert 5nm fabrication tools to 2nm capacity ensures it can meet demand without compromising margins long-term.

Despite the potential for price volatility due to upcoming earnings announcements and geopolitical risks, TSMC's structural advantages, including technological leadership, unmatched scale, and AI/HPC demand resilience, make it a compelling investment opportunity. Investors should focus on TSMC's long-term growth prospects rather than short-term fluctuations.

In conclusion, TSMC's N2 process node is well on track for volume production in the second half of 2025, driven by strong demand for AI and HPC technologies. The company's robust financial performance and strategic positioning in the semiconductor industry make it a key player in the ongoing AI revolution.

References:
[1] https://semiwiki.com/forum/threads/intel-nova-lake-s-uses-tsmc-n2-process-tape-out.23172/
[2] https://www.ainvest.com/news/tsmc-set-report-q2-earnings-strong-ai-fueled-growth-2507/
[3] https://www.trendforce.com/news/2025/07/16/news-ahead-of-tsmc-earnings-10-brokers-weigh-in-on-q3-outlook-currency-pressures-capex-plans-more/