TSMC Cuts 28nm Output at Fab 15A by Over 25% in Pivot to AI Chips

TSMC Pulls Back From Legacy Chips

Taiwan Semiconductor Manufacturing Company, the world's largest contract chipmaker, has slashed monthly wafer starts at its Fab 15A facility in the Central Taiwan Science Park from roughly 200,000 to 150,000 units since early 2026, a reduction exceeding 25%. The move accelerates a strategic pivot away from legacy manufacturing and toward advanced nodes and AI-driven packaging capacity.

Supply chain sources cited on 22 June confirmed the production cut, noting that TSMC is allocating more of the facility's 28nm capacity to support interposer production while gradually phasing out low-margin orders. Shares of TSMC rose in Taipei trading on Monday, breaking through the NT$2,500 mark.

From Legacy to Leading Edge

The output reduction is part of a broader overhaul first reported in May. TSMC is converting Fab 15A, originally dedicated to 28nm and 22nm processes, to support 4nm production, with legacy equipment being relocated and new tooling installed. The total investment, including cleanrooms and manufacturing equipment, is expected to exceed NT$100 billion.

Some of the displaced 28nm and 22nm equipment is being transferred to TSMC's Dresden, Germany facility, which is slated to begin mass production on mature nodes for automotive and industrial customers in 2027.

AI Demand Driving Capacity Reallocation

The shift reflects TSMC's intensifying focus on AI and high-performance computing demand. Earlier this year, analysts noted that TSMC had already added approximately 20,000 wafers per month of 55nm and 65nm capacity specifically for interposer production in 2025, underscoring sustained pressure from AI semiconductor demand.

TSMC CEO C.C. Wei said in early June that the company is intensely focused on fulfilling demand and expressed confidence that revenue would rise by another 30% in 2026. The company reported first-quarter 2026 revenue of $25.9 billion, a 36% year-over-year increase in U.S. dollar terms.

A Deliberate Retreat From Mature Nodes

The capacity reallocation marks a deliberate retreat from the price-competitive mature-node market, where Chinese rival SMIC has aggressively undercut pricing on 28nm wafers. TSMC is betting that margins on advanced packaging and leading-edge logic will more than compensate for lost legacy volume. With interposers and CoWoS packaging central to assembling modern AI accelerators, the company is positioning its factory floor squarely behind the chips that train and run today's largest AI models.