Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) is tightening its grip on the most advanced chipmaking as it ramps its new 2-nanometer process, even as Wall Street grows more bullish on the company’s AI-driven earnings power.
Starts 2nm Production As Big Customers Line Up
Taiwan Semiconductor recently began production of its 2nm “N2” process, its first node to use nanosheet transistors, also known as gate-all-around (GAA).
Analysts surveyed by EE Times said on Thursday the move should keep Taiwan Semiconductor ahead of rivals Samsung Electronics Co. Ltd. (OTC:SSNLF) and Intel Corp. (NASDAQ:INTC) for years, with early 2nm demand expected from top chip designers such as Nvidia Corp. (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL), Advanced Micro Devices, Inc. (NASDAQ:AMD), and Qualcomm Inc. (NASDAQ:QCOM), plus hyperscalers including Microsoft Corp. (NASDAQ:MSFT), Amazon.com Inc. (NASDAQ:AMZN), and Alphabet Inc. (NASDAQ:GOOGL) Google.
International Business Strategies CEO Handel Jones told EE Times that Taiwan Semiconductor will keep most of its leading-edge capacity in Taiwan, with a smaller 2nm footprint expected in the U.S. by 2028.
TechInsights vice chair Dan Hutcheson told EE Times that interest is broad, with more than a dozen customers reportedly engaged around N2.
Rivals Push Back, But Analysts Say The Gap Still Widens
Analysts told EE Times that Taiwan Semiconductor’s consistent execution capacity delivery and roadmap timing continue to set it apart while competitors work through advanced-node challenges.
Jones said the distance between Taiwan Semiconductor and its closest challengers appears to be widening rather than shrinking.
Independent analyst Mike Demler told EE Times that Intel’s 18A process gives it a credible shot to attract additional foundry customers as it matures, even as Taiwan Semiconductor’s N2 begins its own GAA transition without backside power delivery in the first iteration.
Demler added that Taiwan Semiconductor can extend its edge over the next several years by layering in incremental upgrades across follow-on nodes and variants.
DGA Group’s Paul Triolo told EE Times that geopolitics and supply assurance could create selective openings for competitors, particularly where customers want non-Taiwan production, redundancy, or different commercial terms while still leaving Taiwan Semiconductor dominant overall.
Wall Street Lifts Targets As AI Pricing Power Builds
At the same time, a wave of brokerages has raised price forecasts on Taiwan Semiconductor’s shares following the stock’s strong start to 2026, Bloomberg reported on Thursday.
JP Morgan’s Gokul Hariharan raised his forecast by 24% to 2,100 New Taiwanese dollars, citing demand for advanced manufacturing and pricing power.
Taiwan Semiconductor is set to report its December-quarter results next week, and analysts surveyed by Bloomberg expect year-over-year sales growth of about 18% and operating margin above 50%, which would mark a three-year high.
TSM Price Action: Taiwan Semiconductor shares were up 1.33% at $322.92 during premarket trading on Thursday. The stock is approaching its 52-week high of $333.08, according to Benzinga Pro data.
Photo by Jack Hong via Shutterstock
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