Taiwan Semiconductor 2nm competition: Apple secures over half of the capacity, competitors may fall into a passive situation

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

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

Apple's move continues its traditional advantage in advanced processes. As TSMC's largest customer, Apple contributed 22% of the chip foundry giant's revenue in 2024, amounting to $19.4 billion. This massive procurement scale provides Apple with strong negotiating leverage in capacity allocation.

Qualcomm and MediaTek also plan to launch their first 2nm chip products by the end of 2026, but Apple's capacity monopoly strategy may force these competitors into a supply-tight situation.

Apple Exclusively Secures Baoshan Plant Capacity, Competitors Turn to Kaohsiung

TSMC has fully allocated the first batch of 2nm capacity at its Baoshan plant to Apple, while other customers like Qualcomm and MediaTek will rely on the capacity of the Kaohsiung plant. This geographical division reflects Apple's priority position in TSMC's production system.

Reports indicate 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 the first; when TSMC's first-generation 3nm process (N3B) went into mass production, Apple also seized the first-mover advantage, while its competitors took a whole year to catch up.

The high development costs are the main factor hindering competitors from keeping pace. It is estimated that the tape-out cost for Apple's M3 series chips alone reaches $1 billion, a financial barrier that has led Qualcomm and MediaTek to adopt a more cautious strategy with the first-generation 3nm process.

As TSMC rolled out more mature iterations of the 3nm process, Apple's competitors gradually joined the competition at this process node.

TSMC's Capacity Expansion Plans to Meet Customer Demand

In response to Apple's large-scale order demands and other customers' capacity requests, TSMC is actively expanding its 2nm capacity. According to previous estimates, TSMC plans to increase its monthly capacity to 100,000 wafers by 2026.

With TSMC's Arizona plant fully operational, the company's monthly capacity is expected to reach 200,000 wafers by 2028. This capacity expansion plan aims to balance the demands of major customers like Apple with the need to maintain a diversified customer base.

As the world's largest chip foundry, TSMC needs to meet the demands of its largest customer, Apple, while avoiding over-reliance on a single customer that could alienate other important partners