As TSMC accelerates production of 2nm and 3nm nodes, it is simultaneously phasing out legacy technology. According to Commercial Times citing supply chain sources, monthly wafer starts at Fab 15A—TSMC's primary 28nm manufacturing facility—have declined by more than 25% since the start of the year.

This pullback reflects a broader transformation underway at Fab 15A. According to an Economic Daily News report from May, the facility, which has long focused on 28nm and 22nm production, is being converted into a 4nm manufacturing base, with older equipment phased out and new tools brought online. Neighboring Fab 15B continues to serve as a key hub for 7nm production.

Supply chain sources estimate that TSMC's monthly 28nm wafer starts have fallen from approximately 200,000 wafers earlier this year to 150,000 in June. Meanwhile, construction of Fab 25 in Taichung, designated for A14 node production, is progressing rapidly, with civil works at the P1 facility already completed.

Analysts cited by Commercial Times characterize TSMC's approach as a two-pronged strategy: tightening 28nm capacity and directing customers toward 12nm, while simultaneously ramping investment in 2nm, A14, System-on-Integrated-Chips (SoIC), and silicon photonics. The shift is expected to improve capital efficiency and lift average selling prices.

TSMC is also reallocating additional 28nm capacity toward interposer production while scaling back lower-margin business. This shift has prompted some customers to turn to competitors UMC and Vanguard to capture spillover demand. UMC operates a broad 28nm platform and is advancing its 22nm node, positioning it to address demand across OLED display drivers, Wi-Fi, networking, consumer, and automotive chips. If TSMC continues to shift resources toward sub-12nm nodes, UMC could emerge as the primary long-term alternative for 28nm customers.

Vanguard International Semiconductor (VIS) remains primarily focused on 8-inch production but is accelerating construction of its new 12-inch fab in Singapore to capture potential overflow from TSMC. According to an Economic Daily News report from February, TSMC operates roughly 5 million wafers of 8-inch capacity annually, with approximately 80% expected to be gradually transferred to VIS over the coming years.