Competing with Intel, TSMC Announces "A16" Chip Process to Begin Production in 2026

TSMC has announced that its new "A16" (equivalent to 1.6nm) chip manufacturing technology will enter production in the second half of 2026. This move is set to pitch the company against its long-time rival Intel in a battle over who can create the world's fastest chips.

TSMC, the world’s largest contract manufacturer of advanced computing chips and a major supplier for NVIDIA and Apple, suggests that the first adopters of this technology might be manufacturers of artificial intelligence (AI) chips rather than smartphone makers.

Analysts have indicated that TSMC's announcement could call into question industry claims made by Intel in February that it would surpass TSMC with its new Intel 14A technology (equivalent to 1.4nm) to produce the world’s fastest computing chips.

Kevin Zhang, Senior Vice President of Business Development at TSMC, stated that the development of the new "A16" chip manufacturing process has progressed faster than anticipated due to demand from AI chip companies, though he did not disclose any specific clients.

"AI chip companies really want to optimize their designs to leverage every ounce of performance we have," said Zhang.

Zhang also mentioned that TSMC does not see the need to use ASML's new High NA (high numerical aperture) EUV lithography machines for manufacturing the "A16" chips. Last week, Intel revealed its plans to be the first company to use these machines, priced at $373 million each, to develop its Intel 14A chips.

Additionally, TSMC unveiled a new technology for powering chips from the back side, which helps to speed up AI chips and is set to be launched in 2026.

Intel has also announced a similar technology, aiming to make it one of their key competitive advantages.

Analysts say these announcements cast doubt on Intel's claims that it will reclaim the crown in global chip manufacturing.

"It's contentious, but from certain metrics, I don't think they are leading," said Dan Hutcheson, Vice Chairman of research firm TechInsights, when discussing Intel.

However, Kevin Krewell, head of TIRIAS Research, cautioned that both Intel and TSMC's technologies are years away from delivery and must prove that the chips produced can achieve the performance levels touted in their announcements.