2nm chips: The new micro marvels

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  Quantumrun Foresight
• August 23, 2024

Insight summary

The development of 2 nanometer (nm) chips promises to significantly boost electronic devices' performance and energy efficiency, impacting industries and daily life. Companies are competing fiercely to pioneer this technology, which is expected to drive demand in high-performance computing and artificial intelligence (AI). However, the transition involves high costs and technological challenges, potentially affecting accessibility and increasing competitive pressures across the industry.

2nm chips context

The development of 2nm chips marks a significant leap forward in semiconductor technology, promising to enhance various electronic devices' performance and energy efficiency. These chips' transistors are smaller, allowing more to fit on a single chip. This higher density leads to faster processing speeds and lower power consumption because electrons have less distance to travel. Because of these features, the world's leading semiconductor companies are in a fierce race to pioneer this technology. 

TSMC, the dominant player in the global chip market, has already showcased its 2nm prototypes to major clients like Apple and Nvidia, with mass production slated for 2025. This advancement is crucial as the industry anticipates a surge in demand for high-performance chips driven by generative AI and data centers. Meanwhile, with a 25 percent share of the advanced foundry market, Samsung secured a contract with Japan-based startup Preferred Networks Inc. (PFN) in 2024 to supply them with 2nm AI chips. This partnership reflects Samsung's aggressive approach to challenge TSMC's dominance, as it was the first to transition to the more energy-efficient and flexible Gate-All-Around Field-Effect Transistor (GAAFET) transistor architecture for its 3nm chips. 

Meanwhile, Intel aims to regain its former market leadership by introducing its next-generation 1.8nm (18A) chip in late 2024. However, transitioning to these small transistor technologies involves substantial investments and technological challenges. For example, TSMC is constructing two new facilities to support the production of 2nm chips and is exploring approval for a third, indicating the scale of its commitment. 

Disruptive impact

As these chips are integrated into devices like smartphones and laptops, users will experience faster processing speeds and longer battery life, making technology more convenient and energy-efficient. This technological leap may also lead to developing more sophisticated personal devices capable of handling complex applications that demand high computational power. However, the cost of these high-performance devices may become too expensive for average consumers.

For businesses, these chips could enable more powerful data centers and advanced AI applications, allowing them to handle larger datasets and perform more complex calculations at higher speeds. This capability can improve business intelligence and innovation in services and products. Conversely, companies may face increased competition and pressure to adopt expensive new technologies quickly to remain competitive, which could strain resources and lead to disparities in technological adoption among small and large firms.

Meanwhile, enhancing computing power could enable better infrastructure management, from traffic systems to public safety networks, to improve efficiency and response times. As chip manufacturing and supply chains become more critical, governments might need to negotiate trade agreements and regulations that ensure access to these technologies while protecting national security interests. Additionally, with rapid technological advancements, there is an increased need for cybersecurity and data privacy regulations, as more advanced computing capabilities can also mean greater risks.

Implications of 2nm chips

Wider implications of 2nm chips may include: 

• A greater push towards developing and implementing circular economy principles, leading to more sustainable consumption and production patterns.


• Increased demand for technology education and training programs, resulting in a more skilled workforce.


• The rise of smart cities equipped with advanced sensor networks, improving urban planning and resource management.


• New privacy and cybersecurity challenges, prompting governments to enhance regulatory frameworks to protect citizens.


• An acceleration in the development of autonomous vehicles and drones, reshaping transportation and logistics industries.


• The expansion of remote work and telemedicine services, increasing access to jobs and healthcare in rural areas.


• A shift in global economic power as countries with advanced semiconductor manufacturing capabilities gain strategic advantages.


• Energy-efficient data centers reducing the environmental impact of the increasing demand for data processing.


• Greater reliance on advanced analytics and AI in decision-making processes, improving business efficiency and innovation.


• Potential job displacement in traditional manufacturing sectors, requiring policies for workforce retraining and economic support.

Questions to consider

• How could 2nm chips in everyday devices enhance your daily technology usage and overall productivity?


• How might 2nm chips influence your city's infrastructure and the services available to you?