TSMC held its third quarter press conference today. In addition to sharing positive signals for the AI industry, Chairman Wei Zhejia also shared the latest status of N2 and A16.
Wei Zhejia expects that N2 is being mass-produced later this quarter as planned, with good yield performance. He believes that driven by smartphones and HPC AI applications, mass production will accelerate in 2026; TSMC has also launched N2P as an extension of the N2 family, which will be based on N2 to improve performance and power consumption. Mass production is expected in the second half of 2026; as for A16, it will use Super Power Rail Rail, SPR) structure, especially suitable for power-intensive HPC Application, mass production will also be launched in the second half of 2026.
During the Q&A, when asked about the trend of gross profit margin after the 2nm process is put into production, TSMC Chief Financial Officer Huang Renzhao said that it is too early to talk about 2026, but each new node will dilute the gross profit margin during initial mass production. The initial mass production of N2 in 2026 will indeed cause gross profit dilution, but at the same time, the gross profit dilution of N3 is gradually declining, and it is expected to reach the company's average gross profit level in 2026. Objectively speaking, the N2 structure is also more profitable than N3.
In addition, the initial dilution effect of new overseas factories will continue. Huang Renzhao pointed out that in the next few years, it will bring about 2% to 3% gross profit margin dilution in the early stage; and then there is the exchange rate factor. The U.S. dollar fluctuated violently against the New Taiwan dollar at the beginning of this year. Every 1% change will affect the gross profit margin by about 0.4 percentage points as a reference.
Further reading: TSMC’s third-quarter revenue hits a single-quarter high with gross profit margin of nearly 60%, earning more than 5 billion yuan every day it opens its doors Wei Zhejia is optimistic that the demand for AI will continue to be strong! TSMC’s global expansion progresses steadily as planned