World's Most Advanced Microchip

 Introducing the 'World's Most Advanced Microchip' by TSMC

Taiwanese manufacturer TSMC have introduced the world's most advanced microchip: the 2 nanometre (2nm) chip. Mass production is expected for the second half of the year, and TSMC promises it will represent a major step forward in performance and efficiency, potentially reshaping the technological landscape. From the raw materials required to the machines that make them, every part of the chip supply chain is fiercely contested in the global race for tech supremacy. A small town in the Netherlands hosts the only factory which produces the only chip-making machines that generate a type of light found nowhere naturally on Earth: extreme ultraviolet, a light emitted by young stars in outer space. This light, known as EUV, is the only way to make one of the world’s most valuable and important technologies at scale: cutting-edge semiconductor chips. The factory is forbidden from selling its EUV machines to China. Microchips are the foundation of modern technology, found in nearly all electronic devices, from electric toothbrushes and smartphones to laptops and household appliances. They are made by layering and etching materials like silicon to create microscopic circuits containing billions of transistors. These transistors are effectively tiny switches, managing the flow of electricity and allowing computers to work. In general, the more transistors a chip contains, the faster and more powerful it becomes.

Chips are made up of layers of thin, flat pieces of silicon, called wafers which hold electric circuits. These circuits are comprised of billions of switches called transistors. Highly complex, powerful chips containing these networks of transistors are commonly referred to as semiconductors. Chipmakers strive to meet a prediction called Moore’s law: that capacity, or the number of transistors on a chip, tends to double every two years. If chips are to stay the same size, and ideally get smaller, this means that transistors must be ever finer. If you want to make semiconductors, you’ll need $380m. This is the cost of the latest EUV machine from Advanced Semiconductor Materials Lithography (ASML). Shipping is a nightmare: the machine is so large and so delicate that it requires 40 freight containers, three cargo planes and 20 trucks to transport it from the Dutch factory in Veldhoven. All this to create and focus light with wavelengths almost as short as X-rays, with enough energy to penetrate solid objects. ASML’s machine carves the patterns into the silicon wafers that hold the transistors. The finer the patterns, the more computing power you can pack on to a chip. Marc Assinck, a company spokesperson, likens light wavelengths to the thickness of a pen stroke. The more detail you want on a page, the thinner your pen should be. EUV light has a wavelength so narrow that it is invisible to the human eye and passes right through most materials. 

The light is produced by firing a laser at microscopic balls of tin. The tin evaporates into plasma, and the plasma emits light, which is moved through the lithography machine, hitting specially made mirrors. The light is shone through a “mask”, which is the pattern of one layer of a chip, on to the wafer. The area exposed to light hardens and the area not exposed is dissolved in a chemical solution, leaving behind a 3D pattern. Think of a chip like a building with 100 floors. Each building takes four months to produce, and each floor has its own layout, only the features of this layout can be just 25 nanometres: smaller than particles of influenza viruses, which are about 100 nanometres. EUV and other lithography machines carve the patterns of these layers, one by one. The machines aren’t easy to make. Like chips themselves, they’re assembled in dust-free rooms, the cleanest spaces on earth. Chips function at the level of atoms: a single speck of dust can render them useless. The microchip industry consistently endeavours to pack more transistors into a smaller area, leading to faster, more powerful, and energy efficient technological devices. Compared to the previous most advanced chip, known as 3nm chips, TSMC's 2nm technology should deliver notable benefits. These include a 10%-15% boost in computing speed at the same power level or a 20-30% reduction in power usage at the same speed. Additionally, transistor density in 2nm chips is increased by about 15%, over and above the 3nm technology. This should enable devices to operate faster, consume less energy, and manage more complex tasks efficiently.

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. ASML makes the machines that make chips, but it doesn’t make the chips themselves. That is done, chiefly, by another remarkable company with another unremarkable name: TSMC, or Taiwan Semiconductor Manufacturing Company, which produces nine in every 10 of the world’s most advanced semiconductors, including those that power iPhones. Taiwan's microchip industry is closely tied into its security. It is sometimes referred to as the "silicon shield", because its widespread economic importance incentivises the US and allies to defend Taiwan against the possibility of Chinese invasion. In 2022, the US convinced the Dutch government to place export controls on ASML’s machines, restricting their sale to China. To date, ASML says, no EUV lithography machines have been shipped to China, which means that unless, or until, it invents its own EUV lithography machines, China will be working with technology a few years older, and less powerful, than that of western countries, deep ultraviolet lithography, for example, instead of extreme ultraviolet. These machines can still produce very complex chips at scale, just not as complex. Artificial intelligence, another technology in which the US and China are fiercely competing to advance, relies on among the world’s most complex and powerful semiconductor chips. The leading designer of these chips is an American company called Nvidia. Its chips are produced by TSMC on machines made by ASML. 

China’s lack of access to EUV lithography explains why the debut of the Chinese chatbot DeepSeek came as such a shock to markets. A Chinese company produced a product as powerful as Chat GPT with less advanced, cheaper, technology. DeepSeek claims that it cost just $6m to train, compared with the billions of dollars spent by US companies to do the same thing. “The US believes that AI will be a transformative technology, impacting nearly every sector of the economy,” says Chris Miller, the author of Chip War: the Fight for the World’s Most Critical Technology. “So it doesn’t want China to gain an advantage.” It is also crucial for defence and intelligence. The Chinese People’s Liberation Army has made “significant progress” in its efforts to use AI in combat in recent years, according to the Centre for Security and Emerging Technology. But not everyone believes that China’s access to ASML’s machines should be restricted, including ASML. China boasts other advantages over western countries in the race to produce chips. In addition to silicon, semiconductors require critical and rare earth minerals. Among the critical minerals are germanium and gallium. By 2030, gallium demand is projected to increase more than 350% from 2015 levels. Germanium demand is expected to double over the same period. China produces 98% of the world’s raw gallium, and more than two-thirds of the world’s raw germanium. Rare earths are a group of metals used in chips, as well as defence and green technologies, that are often particularly difficult to process. In 2024, China produced 60% of the world’s rare earths, but processed 90%, according to the Centre for Strategic and International Studies. This is one reason why Donald Trump is pressuring Ukraine into handing over its rare earths in exchange for aid. 

In 2024, Chinese company Shanghai Microelectronics Equipment (SMEE) revealed that, a year earlier, it had filed a patent for an EUV lithography machine. TSMC recently struck a US$100 billion deal (£76 billion) 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 which could undermine the island's security. 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. Then there are quantum chips. Quantum chips would, in theory, allow computers to solve problems much, much faster than the world’s current super computers. This is because instead of being the equivalent of on or off, or a zero or a one, quantum chips can be both states at once, and every state between. A common explanation is a maze: a normal computer would find the path through a maze by testing each option, one after the other. A quantum computer could test all of them at once.

In 2020, TSMC started a special microchip miniaturisation process, called 5nm FinFET technology, which 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 miniaturisation process based on even smaller microchips. This further enhanced performance and power efficiency. Apple's A-series processor is based on this technology. 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 has the potential to enhance AI-based applications such as voice assistants, real time language translation, and autonomous computer systems. Data centres could experience reduced energy consumption and improved processing capabilities, contributing to environmental sustainability goals. So far, quantum computing has been achieved only in limited circumstances. But Microsoft announced this month that it had built a chip which could mean quantum computers might be built within years rather than decades. 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. Meanwhile, China’s public spending on quantum technology is four times that of the US. And the chips are not made with EUV machines. Instead, quantum chips are made by machines which carve patterns into chips using electrons. And China has these machines. China also has a resource often overlooked in the chip debates, says David Reilly, professor of physics and the head of the University of Sydney’s quantum programme. “The key to all of this is people,” he says. “There are a lot of smart people in China. They produce a lot of Stem graduates,” he says. And those graduates tend to do undergraduate or postgraduate degrees at the top US, Australian, European universities before returning. “I don’t want to say governments are sort of blind to that, but we do focus a lot on the transfer of tangible stuff,” he says. “Inventions don’t happen in a vacuum.” 

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. Producing 2nm chips requires cutting-edge techniques like extreme ultraviolet (EUV) lithography. This complex and expensive process increases production costs and demands extremely high precision. Another big issue is heat. Even with relatively lower consumption, as transistors shrink and densities increase, managing heat dissipation becomes a critical challenge. Overheating can impact chip performance and durability. In addition, at such a small scale, traditional materials like silicon may reach their performance limits, requiring the exploration of different materials. The enhanced computational power, energy efficiency, and miniaturisation enabled by these chips could be a gateway to a new era of consumer and industrial computing. Smaller chips could lead to breakthroughs in tomorrow's technology, creating devices which are not only powerful but also discreet and more environmentally friendly around the world.