TSMC Starts 2nm Production and Secures U.S. China Licenses

The Taiwan Semiconductor Manufacturing Company (TSMC) commenced volume production of its 2-nanometer (N2) chips in the fourth quarter of 2025. Utilizing a nanosheet transistor structure for increased density and energy efficiency, the company is producing these advanced semiconductors at its Fab 20 facility in Hsinchu and Fab 22 facility in Kaohsiung, Taiwan. Despite investing in facilities abroad, Taiwan continues to produce its most advanced chips on home soil to maintain its global indispensability.

Concurrent with this advancement, the U.S. Department of Commerce granted TSMC an annual export license on January 1, 2026, for its fabrication plant in Nanjing, China. This license follows the December 31, 2025, expiration of validated end-user status exemptions and allows the supply of U.S. export-controlled items without individual vendor licenses. The Nanjing site focuses on 16-nanometer and other mature-node chips for automotive and consumer electronics.

U.S. officials granted similar annual licenses to Samsung Electronics and SK Hynix to ensure global supply chain stability for data centers and electronics. While these licenses permit equipment maintenance to avoid operational interruptions, the U.S. continues to ban capacity expansions and technology upgrades in China to ensure those facilities remain a generation behind cutting-edge plants in the U.S., Taiwan, and Japan. This regulatory balance persists as a trade truce between Donald Trump and Xi Jinping has delayed certain semiconductor tariffs until June 2027.