TSMC 2nm Battle: Apple Secures Over Half of Production Capacity, Rivals May Be Forced into a Passive Position

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Apple has secured more than half of TSMC's initial 2nm production capacity, even reserving an entire manufacturing plant. This aggressive strategy will force competitors like Qualcomm and MediaTek into a disadvantage in the new round of the chip race.

On Friday, according to Economic News Daily, Apple has further increased its reserved share of TSMC's 2nm capacity from nearly 50% to more than 50%. TSMC’s 2nm process is expected to enter mass production this quarter, a milestone for the entire semiconductor industry.

This move continues Apple’s traditional advantage in advanced process nodes. As TSMC’s largest customer, Apple contributed 22% of the chip foundry giant's revenue in 2024, totaling $19.4 billion. This massive purchasing volume provides Apple with powerful bargaining leverage in capacity allocation.

Qualcomm and MediaTek also plan to launch their first 2nm chip products by the end of 2026, but Apple’s monopolization of capacity may force these competitors into supply shortages.

Apple exclusively secures capacity at TSMC’s Baoshan plant, competitors turn to Kaohsiung

TSMC has allocated the first batch of 2nm capacity at its Baoshan plant entirely to Apple, while other customers like Qualcomm and MediaTek will have to rely on the Kaohsiung plant. This geographical division reflects Apple’s priority status within TSMC’s manufacturing system.

Reports state that Apple plans to launch four new chips based on the 2nm process in 2026, further consolidating its technological leadership in the mobile processor field.

History repeats: Lessons from the 3nm race

Apple’s aggressive strategy for 2nm capacity is not new; with TSMC’s first-generation 3nm process (N3B) mass production, Apple also seized the first-mover advantage, while competitors took a whole year to catch up.

The high development costs are the main obstacle preventing competitors from keeping pace. It is estimated that the tape-out cost of Apple’s M3 series chips alone reached $1 billion, setting a financial threshold that led Qualcomm and MediaTek to adopt a more cautious approach with the first-generation 3nm process.

As TSMC introduced more mature iterations of the 3nm process, Apple’s competitors gradually joined the race at this process node.

TSMC capacity expansion plans meet client demand

Facing Apple’s large-scale demand and other customers’ capacity needs, TSMC is actively expanding its 2nm capacity. According to previous estimates, TSMC plans to increase monthly capacity to 100,000 wafers by 2026.

With the Arizona plant coming fully online, the company’s monthly capacity is expected to reach 200,000 wafers by 2028. This expansion aims to balance the needs of major clients like Apple with maintaining client diversity.

As the world’s largest chip foundry, TSMC needs to meet Apple’s massive demand while avoiding over-reliance on a single client and distancing other important partners.

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