TSMC’s advanced manufacturing capacity is fully booked through 2028, creating a significant supply bottleneck in the semiconductor industry. Major customers like Nvidia, Apple, AMD, and Qualcomm have reserved all slots for TSMC’s 2-nanometer process, while the 3-nm node has reached full utilization since entering mass production in late 2023.
The capacity crunch stems from explosive demand driven by artificial intelligence workloads. Broadcom has identified TSMC’s output as a chokepoint for the entire supply chain. Natarajan Ramachandran, a director at Broadcom, stated that TSMC is nearing its production limits, a stark shift from previous descriptions of its capacity as “unlimited.”
Apple is estimated to hold over 50% of the early 2nm allocation for 2026 and 2027, which limits availability for other customers. In light of existing demands for AI GPUs, cloud data center chips, and mobile processors, TSMC has suspended new 3nm project kick-offs and is steering its customers toward the newer 2nm process to optimize production schedules.
Wafer costs are rising, with TSMC’s 2nm pricing expected to exceed $30,000 per wafer, compared to around $20,000 for the 3nm family. TSMC plans annual price hikes of 3 to 5 percent for sub-5nm nodes through at least 2029.
The ongoing supply squeeze has opened opportunities for Samsung Electronics, the only other chipmaker with 2nm capabilities. Samsung has secured orders from Tesla and Nvidia and plans to use its Texas fabrication facility to attract clients from TSMC’s overflow. The foundry division aims to exceed 2 trillion won in operating profit for 2026, marking a return to profitability after losses since 2023.
Samsung’s 2nm node has achieved 50% yields ahead of mass production planned for the second half of 2026. The company anticipates a more than 30% increase in 2nm-related orders year-over-year. However, industry observers caution that Samsung must consistently demonstrate yield rates to become a preferred choice over TSMC. As one source noted, “For Samsung to move beyond being an alternative and become a preferred choice, it must ultimately demonstrate its technological prowess.”
