Taiwan's New 2Nm Chip Set To Power The AI Revolution

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Taiwan's microchip industry is closely tied to its security. It is sometimes referred to as the“silicon shield”, because its widespread economic importance incentivizes the US and allies to defend Taiwan against the possibility of Chinese invasion.

TSMC recently struck a US$100 billion deal to build five new US factories. However, there is uncertainty over whether the 2nm chips can be manufactured outside Taiwan , as some officials are concerned that could undermine the island's security.

Established in 1987, TSMC, which stands for Taiwan Semiconductor Manufacturing Company, manufactures chips for other companies. Taiwan accounts for 60% of the global“foundry” market (the outsourcing of semiconductor manufacturing) and the vast majority of that comes from TSMC alone .

TSMC's super-advanced microchips are used by other companies in a wide range of devices. It manufactures Apple's A-series processors used in iPhones, iPads, and Macs, it produces NVidia's graphics processing units (GPUs) used for machine learning and AI applications.

It also makes AMD's Ryzen and EPYC processors used by supercomputers worldwide, and it produces Qualcomm's Snapdragon processors, used by Samsung, Xiaomi, OnePlus, and Google phones.

In 2020, TSMC started a special microchip miniaturisation process, called 5nm FinFET technology , that played a crucial role in smartphone and high-performance computing (HPC) development. HPC is the practice of getting multiple processors to work simultaneously on complex computing problems.

Two years later, TSMC launched a 3nm miniaturization process based on even smaller microchips. This further enhanced performance and power efficiency. Apple's A-series processor, for example, is based on this technology.

TSMC makes the world's most advanced microchips. Photo: Michael Vi / Shutterstock

Smartphones, laptops and tablets with 2nm chips could benefit from better performance and longer battery life. This will lead to smaller, lighter devices without sacrificing power.

The efficiency and speed of 2nm chips have the potential to enhance AI-based applications such as voice assistants, real-time language translation and autonomous computer systems (those designed to work with minimal to no human input).

Data centers could experience reduced energy consumption and improved processing capabilities, contributing to environmental sustainability goals.

Sectors like autonomous vehicles and robotics could benefit from the increased processing speed and reliability of the new chips, making these technologies safer and more practical for widespread adoption.

This all sounds really promising, but while 2nm chips represent a technological milestone, they also pose challenges. The first one is related to the manufacturing complexity.