TSMC Enters 2026 on a Strong Technological and Regulatory Footing

Taiwan Semiconductor Manufacturing Company (TSMC) is beginning the new year with significant momentum, bolstered by key technological and regulatory developments. Sustained high demand from the artificial intelligence sector further solidifies the company's foundation for 2026.

Additional momentum is being driven by the ongoing AI boom. Supply chain sources indicate that Nvidia has formally requested TSMC to immediately ramp up production of its H200 AI processors. This surge is reportedly due to major Chinese tech conglomerates collectively placing orders exceeding two million units.

This increased demand directly impacts TSMC's 4nm manufacturing lines:
* Capacity Utilization: The additional H200 volumes are expected to further tighten capacity for advanced manufacturing nodes, at least through the first half of 2026.
* Revenue Visibility: These orders help bridge the gap until Nvidia's next-generation "Blackwell" chips reach full production, thereby enhancing TSMC's planning certainty.
* Pricing Power: The intense demand for AI chips strengthens TSMC's ability to command premium prices for its leading-edge manufacturing services.

This close partnership with Nvidia and the broader AI wave is set to positively influence the company's financial results in the coming quarters.

Breakthrough 2nm Production Commences

A major milestone was achieved in the fourth quarter of 2025 as TSMC officially initiated volume production of its new 2-nanometer (N2) node. The launch is taking place at the Fab 22 facility in Kaohsiung, southern Taiwan, which is now delivering the first production units.

While Fab 20 in Hsinchu was originally slated to lead the 2nm rollout, its mass production will follow at a later date. The N2 technology represents a fundamental shift, moving from classical FinFET structures to Gate-All-Around (GAA) nanosheet transistors. This new architecture is designed to deliver either an estimated 10–15% higher performance or approximately 25–30% lower power consumption compared to the preceding N3E node—a critical advantage for high-performance computing and AI applications.

Should investors sell immediately? Or is it worth buying TSMC?

With this ongoing 2nm production in Kaohsiung, TSMC states it is currently manufacturing the world's most advanced logic chips, reinforcing its technological lead over competitors like Samsung and Intel.

U.S. Export License Ensures China Operations

In a parallel regulatory development, the U.S. Department of Commerce has granted TSMC an annual export license for its fabrication plant in Nanjing, China. This new authorization follows immediately after the expiration of the previous "Validated End-User" status on December 31, 2025.

The license permits TSMC to continue importing U.S.-controlled manufacturing equipment to its Nanjing site without requiring separate approval from individual suppliers for each shipment. This significantly reduces the risk of supply chain disruptions.

The Nanjing facility primarily produces older technology nodes, such as 16nm and 28nm. While these are not considered leading-edge, they remain essential for industries like automotive and consumer electronics. The new export license thus provides operational predictability for a segment that, while less prominent, delivers stable demand.

Share Performance and Forward Trajectory

The positive news flow is reflected in the company's share price as the year concluded. TSMC's stock closed trading on December 31, 2025, at $303.89, marking a 52-week high and registering a gain of over 20% on a 30-day view.

Heading into the first months of 2026, the company is supported by three clear pillars: the launched mass production of 2nm chips in Kaohsiung, a secured supply chain for U.S. equipment at its Nanjing plant, and robust AI-driven demand that ensures high utilization of its advanced nodes until the next generation of Nvidia chips arrives.