Taiwan Semiconductor Manufacturing Company (TSMC) is phasing out its smallest wafer production line, marking the end of its 6-inch (150 mm) fabs within the next two years. The company confirmed that its Fab 2 in Hsinchu will stop regular production by 2027, as part of a strategy to streamline operations and consolidate resources around larger wafers.
The move reflects a global shift in semiconductor economics: smaller wafers produce fewer chips and cannot compete with the efficiency of 200 mm and 300 mm production. By retiring older lines, TSMC will free up equipment, talent, and space for advanced processes and packaging tied to its flagship gigafabs.
From Legacy to Advanced Nodes
TSMC says customers will be supported through a migration to nearby 200 mm lines and, where possible, to 300 mm advanced fabs. Some of the retired facilities may be repurposed for IC assembly or advanced packaging, though speculation remains over whether TSMC will sell or spin off certain assets.
The company began GaN (gallium nitride) wafer production on 6-inch lines in 2014, later expanding it to 8-inch in 2021. But as competition from low-cost Chinese fabs intensifies, margins on legacy wafers have thinned. Earlier this year, TSMC exited the GaN foundry business entirely, signaling that its future lies in high-performance semiconductors, not commodity power electronics.
The Bigger Picture
TSMC currently operates one 6-inch fab, four 8-inch fabs, and four 12-inch fabs in Taiwan. Phasing out the smallest facility won’t dent its balance sheet but will sharpen its focus on efficiency. Like NXP, which is closing four 8-inch fabs to transition to 12-inch, TSMC is betting on scale: larger wafers yield more dies, faster cycle times, and stronger economics.
What This Means for Electronics
For electronics makers, this shift is a double-edged sword. On one hand, it ensures TSMC’s resources are focused on advanced chips that power AI, data centers, and next-generation consumer devices. On the other hand, it shortens the runway for products that still depend on legacy 150 mm platforms, from industrial controllers to power electronics.
This will likely force smaller customers to migrate faster than expected, negotiate new schedules, or even seek out second-tier fabs outside Taiwan. The broader message is unmistakable: the era of small wafers is over.
TSMC is signaling to the entire industry that survival lies in scaling up. As Andy Grove once said, “Only the paranoid survive”, and in this case, TSMC’s paranoia ensures it stays ahead, even if it means leaving legacy electronics behind.
