October 14th 2024

Apple Inc. (AAPL), Qualcomm Inc. (QCOM), Nvidia Corp. (NVDA), and Advanced Micro Devices Inc. (AMD) have nearly completely booked Taiwan Semiconductor Manufacturing Company’s (TSMC) 3nm chip production capacity until 2026, driven by the surge in artificial intelligence demand.

This increase in demand highlights the rapid advancement of AI technology, prompting TSMC to further innovate in advanced manufacturing, according to TechNode.

The N3E process, which began mass production last quarter, focuses on AI accelerators, high-end smartphones, and data centers. The N3P process, set to start mass production later this year, will target mobile devices and consumer electronics and is expected to become the standard by 2026.

To meet the rising demand, TSMC plans to modify some of its 5nm equipment to boost 3nm production capacity, potentially increasing monthly 3nm wafer output to between 120,000 and 180,000 units. TSMC’s stock rose on Thursday.

The company is also expanding its operations beyond Taiwan, with reports indicating that TSMC aims to hire 2,000 employees in Europe as part of its plan to build a wafer fabrication facility in Dresden.

Moreover, TSMC has significantly outperformed leading Chinese chipmaker Semiconductor Manufacturing International Corp (SMIC), capturing a 62% market share in the first quarter. The company reported a 30% sales increase in May, reaching $7.1 billion, as demand for AI continues to grow unabated.