The Intense Competition in 2nm Process Tech: Delays, Order Transfers, and Multi-Party Rivalry

2025-01-08

With the rapid development of technology, 2-nanometer (2nm) chips have become the focus of competition among major tech giants. In this field, the increasing phenomena of delayed releases and order transfers indicate that the competition in the 2nm chip market has entered a white-hot stage.

01 Challenges Faced by TSMC

TSMC has long been a leader in chip process technology, however, it has encountered numerous challenges in the 2nm process. According to reports, when TSMC initiated trials of the 2nm process at its Hsinchu Baoshan factory, the initial yield was low, which had a significant impact on the final manufacturing cost of the chips. The cost per wafer was as high as tens of thousands of US dollars, and the low yield meant a large amount of waste.

Facing such high costs and low yields, Apple decided to postpone the use of TSMC's 2nm process in the next-generation iPhone 17 Pro series, with plans to adopt it in the iPhone 18 Pro series in 2026. This decision undoubtedly brought considerable pressure on TSMC, as Apple is one of its important customers. Similarly, MediaTek also postponed its plans to introduce the 2nm process and instead opted for TSMC's N3P process. Furthermore, tech giants such as NVIDIA and Qualcomm are also considering transferring some of their 2nm chip production orders from TSMC to Samsung.

02 Samsung's Dilemma and Opportunity

Samsung's performance in 3-nanometer process yields has been poor, causing many clients to turn to TSMC. However, Samsung also sees the importance and opportunities in the 2nm process. According to plans, Samsung will initiate trials of the 2nm process in the first half of 2025 and has already received orders from companies such as Japan's PFN. In addition, NVIDIA and Qualcomm are considering transferring some of their 2nm process orders from TSMC to Samsung due to capacity and cost considerations. If Samsung can make breakthroughs in the 2nm process, improve yields, and control costs, it will regain competitiveness in the chip manufacturing market.

03 The Entry of Japan's Rapidus

Japan's Rapidus is also actively involved in the competition for the 2nm process. The company plans to complete the prototype development of 2nm chips in spring 2025 and achieve mass production in 2027. Junichi Koike, CEO of Rapidus, stated that although TSMC leads in the timeline for mass production of the 2nm process, Rapidus is confident in having an advantage in process progress and can rapidly improve yields and efficiency to eventually catch up with TSMC.

04 The White-Hot Competition in 2nm Process

In this competition for 2nm chips, vendors such as TSMC, Samsung, and Rapidus are actively investing in research and development and production. TSMC has officially announced its N2 (2nm) manufacturing technology and plans to mass produce it in 2025. Samsung has demonstrated performance improvements and power efficiency enhancements in its 2nm process and plans to initiate trials in the first quarter of 2024. Rapidus, on the other hand, plans to complete the prototype development of 2nm chips in spring 2025 and achieve mass production in 2027. This competition is not only a contest of technology and funds but also a profound reflection on the competitive landscape of the industry. Meanwhile, the phenomena of delayed releases and order transfers may lead to instability in the supply chain, thereby affecting product production and delivery.

For chip design companies such as NVIDIA and Qualcomm, they hope to have more process options to avoid excessive dependence on TSMC. If TSMC forms a monopoly, chip design companies will face higher foundry prices and lack bargaining power. Therefore, the competition between vendors such as Samsung and Rapidus with TSMC in the 2nm process is beneficial for chip design companies.

05 Future Outlook

Currently, the competition in the 2nm chip market has entered a white-hot stage. In the future, with continuous technological advancements and expanding markets, competition in the high-end field of chip manufacturing will intensify. In this competition, diversified development strategies, technological innovation, and market expansion will be key to a company's success. In the future, who will occupy a leading position in the field of 2nm chips will depend on their technological strength, market strategies, and ability to sustain investment. At the same time, supply chain stability and cost control will also become important factors in corporate competition.

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