Taiwan Semiconductor Manufacturing Co (TSMC) recently opened up about a new chip manufacturing technology “A16” which will go into the production phase in the second half of 2026. This will put TSMC in direct competition with its long-time rival Intel for creating the fastest chips in the world.
TSMC, the biggest contract manufacturer of advanced computing in the world is a major supplier to Nvidia and Apple. The company announced the news at a conference in Santa Clara, California, where TSMC executives said that makers of AI chips will likely be the first users of the tech instead of smartphone makers.
Reuters noted that the technologies announced during the conference could question Intel’s claims about overtaking TSMC in developing the world’s fastest computing chips with a new tech Intel likes to call “14A.”
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A16 Chipmaking Process To Facilitate AI Chip Making
Kevin Zhang, TSMC's senior vice president of business development, told the media that TSMC has developed the new chipmaking process faster than expected due to the demand of AI chip companies, without naming specific buyers. AI chip firms "really want to optimize their designs to get every ounce of performance we have," Zhang said.
Zhang said that TSMC might not use A SML’s new "High NA EUV" lithography tool machines to produce the A16 chips. Intel recently revealed that it plans to be the first to leverage the machines, which might cost $373 million each, to develop its 14A chip. TSMC also announced a new tech for supplying power to computer chips from the backside of the chip, which helps speed up AI chips and will be available in 2026. Intel has announced a similar tech which aims to be one of its primary competitive benefits.
Analysts said the new announcements could challenge Intel’s claims that it will become the leader in chipmaking around the globe. "It's debatable, but on some metrics, I don't think they're ahead," Dan Hutcheson, vice chair at analyst firm TechInsights, said of Intel.
But Kevin Krewell, a principal at TIRIAS Research, said that both companies are years away from offering the technology and will be required to prove that real chips match their keynote presentations.
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TSMC Chips Made Outside Of Taiwan To Cost More
It seems that TSMC chips would witness a rise in price if manufacturers choose to buy them outside of Taiwan. “If a customer requests to be in a certain geographical area, the customer needs to share the incremental cost,” TSMC CEO CC Wei said on an earnings call. “In today’s fragmented globalization environment, the cost will be higher for everyone, including TSMC, our customers, and our competitors.”
It is reported that the company has already kicked off the price increase with buyers. As per the Financial Times reports, it would enable the company to produce chips outside of its home base, where more than 90% of the most advanced chips are created.