The race to dominate the 2-nanometer (nm) semiconductor technology is heating up at the beginning of the year, a key battleground among global foundry (semiconductor contract manufacturing) companies.
According to industry sources on Jan. 29, major foundry enterprises like Samsung Electronics, TSMC, and Intel are poised to commence mass production of 2-nm process semiconductors as early as this year. Consequently, a fierce competition for supremacy in 2-nm technology is expected to escalate from next year. Currently, the most advanced mass production technology in the world is at 3-nm.
TSMC’s 2-nm products will be produced at the “20Fab” in the Baoshan area of Hsinchu Science Park in northern Taiwan and at a factory in Kaohsiung, southern Taiwan. The Baoshan Fab is expected to start receiving equipment related to 2 nm as early as April, and mass production of 2 nm using a gate all around (GAA) process, instead of FinFET, is projected to begin in 2025.
On Jan. 18, TSMC revealed in a conference call that its capital expenditure (CAPEX) for this year is projected to be between US$28 billion and US$32 billion, with the majority (70-80%) being allocated to advanced processes. This figure is similar to last year’s (US$30.4 billion), suggesting a steady investment towards securing a lead in the 2-nm process.
Intel, having announced its re-entry into the foundry business, is aggressively moving forward with its foundry construction. The plan includes introducing the 20 angstrom (A, equivalent to 2 nm) process in the first half of the year and the 18 A (1.8 nm) manufacturing process in the second half. It is known that the 18 A process will begin production testing as early as the first quarter of this year.
Intel’s 2-nm road map is more ambitious than initially expected, advancing by more than six months. To counter criticisms of an overly aggressive plan, Intel has swiftly engaged in acquiring advanced extreme ultraviolet (EUV) equipment. Successfully securing ASML’s High NA EUV lithography equipment for 2-nm semiconductor production enables Intel to advance its 20 A mass production.
Samsung Electronics has strategized to gain an upper hand in the ultra-fine process war through its GAA technology. It is currently mass producing the first generation 3 nm based on GAA (SF3E) and plans to mass produce the second generation 3 nm process this year, which significantly improves performance and power efficiency.
For 2 nm, Samsung plans to start mass-producing the 2-nm process (SF2) aimed at mobile devices in 2025, expanding progressively to high-performance computing (HPC) in 2026 and automotive processes in 2027. Samsung is currently producing 3-nm GAA foundry process products at its Hwaseong campus and plans to produce both 3-nm and 2-nm processes at its Pyeongtaek campus in the future.
The movement of Rapidus, a consortium of eight Japanese companies, is also noteworthy. Rapidus has set a goal to test-produce 2 nm process semiconductors by 2025 in its new factory and to start mass production from 2027. If Rapidus’ technology is proven, the global foundry market is likely to expand from a Taiwan-Korea duopoly to a four-power system including Taiwan, Korea, the U.S., and Japan.
The technological competition to be a “game-changer” will ultimately be decided in the battle to secure customers. In this regard, TSMC is reportedly leading the race in the 2-nm segment. There are widespread rumors in the industry that Apple will be the first customer of TSMC’s 2-nm process. Nvidia, a powerhouse in graphics processing units, is also considered a major client in TSMC’s customer base.
This alignment of big tech companies has resulted in TSMC holding a dominant 57.9% share in the foundry market as of the third quarter of last year, with Samsung Electronics in second place at 12.4%, marking a significant gap of 45.5 percentage points.
Samsung Electronics is not standing still, however. With consistent technological investments, the number of Samsung’s foundry customers has increased to over 100 in 2022, a 2.4-fold increase from 2017. The company aims to expand this to around 200 by 2028. Particularly, Samsung’s early adoption of GAA is expected to be advantageous in achieving early yields in advanced processes.