Taiwan Semiconductor Manufacturing Co’s (NYSE:TSM) plan to produce 2nm chips in Taiwan is progressing steadily as the contract chipmaker prepares to begin commercializing 4nm chips at its Arizona fab.

The chipmaker has completed limited risk production of ~5,000 wafers leveraging its 2nm process at the Baoshan fab in Hsinchu Science Park, TechNode reports. 

Taiwan Semiconductor has planned to roll out its 2nm production at the Baoshan and Kaohsiung fabs.

Also Read: Broadcom Thrives with 114% Stock Surge in AI Boom, While Intel Faces Steep Decline

During an earnings call, Taiwan Semiconductor Chair C.C. Wei said the company does not expect a shift toward chipset designs driven by high-performance computing (HPC) to affect its 2nm production.

Wei said that growing interest in 2nm has increased demand, surpassing 3nm.

Taiwan Semiconductor launched the N2P process technology to support smartphone and high-performance computing (HPC) applications. Mass production will begin in the second half of 2026, he added.

Shares in Taiwan closed higher on Friday, buoyed by gains in the electronics sector, particularly Taiwan Semiconductor, the most extensive stock by market weight.

The Taiex showed resilience despite mixed signals from U.S. markets, which saw slight declines in the Dow Jones Industrial Average and Nasdaq index on Thursday, Focus Taiwan reports.

Analysts credited Taiwan Semiconductor’s strong performance for lifting the Taiex, contributing 80 points to the index’s rise.

Elon Musk, CEO of Tesla Inc (NASDAQ:TSLA) also highlighted Taiwan’s significant technical expertise as the foundation of its semiconductor industry’s success in an X post on December 28, where he praised the island’s talent pool in response to a discussion about Taiwan Semiconductor, Focus Taiwan reports.

Responding to a post by Bojan Tunguz, a former data scientist at Nvidia Corp (NASDAQ:NVDA), Musk credited Taiwan’s untapped talent pool for Taiwan Semiconductor’s dominance.

Tunguz had criticized the U.S. tech industry’s historical anti-immigrant biases, arguing they led Morris Chang to establish Taiwan Semiconductor in Taiwan rather than the U.S.

Taiwan Semiconductor plays a critical role in global chip production, holding a 64.9% market share in the third quarter of 2024, Focus Taiwan cites TrendForce.

Musk’s recent praise contrasts with his earlier comments on Taiwan’s geopolitical status. In 2022, he suggested Taiwan could be designated a “special administrative zone” to ease tensions with China, likening Taiwan’s relationship with China to Hawaii’s ties with the U.S.

Donald Trump has also voiced concerns over trading with Taiwan. Previously, Trump expressed concerns about trade with Taiwan, accusing the country of undermining the U.S. chip industry.

He criticized the CHIPS Act and vowed to impose tariffs on Taiwanese chips if elected. Trump questioned the U.S. defense position with Taiwan, citing the absence of a formal treaty, and opposed federal CHIPS Act funding for foreign companies like Taiwan Semiconductor.

Taiwan Semiconductor stock surged over 101% in the last 12 months.

Investors can gain exposure to the semiconductor stocks through VanEck Semiconductor ETF (NASDAQ:SMH) and ProShares Ultra Semiconductors (NYSE:USD).

Price Action: TSM stock is up 0.92% to $203.43 premarket at the last check on Friday.

Also Read:

• Xiaomi Expands EV Charging Options, Partners with NIO, XPeng, and Li Auto for Greater Network Access

Image via Shutterstock