Recently, there have been rumors in the market that TSMC will withdraw from the gallium nitride (GaN) market, and the related production lines of the wafer fab located in Zhuke have also stopped production. And Navitas, the main customer of TSMC's gallium nitride foundry business, also pointed out that TSMC will end its gallium nitride (GaN) wafer foundry business on July 31, 2027 and intends to seek capacity support from TSMC.
On July 3rd, according to the latest news from TSMC, after a complete evaluation, the company has decided to gradually withdraw from the gallium nitride (GaN) business over the next two years. This decision is based on the long-term business strategy of the market and TSMC. The company is working closely with customers to ensure smooth transition and is committed to continuing to meet customer needs during this period.
TSMC emphasizes that it will continue to focus on creating value for partners and the market, and gradually withdrawing from the gallium nitride business will not affect its previously announced financial goals. TSMC estimates that US dollar revenue will grow by 24% to 26% this year.
TSMC began to enter the field of gallium nitride foundry with 6-inch factories many years ago. In recent years, it has actively invested in the research and development of 8-inch foundry technology, seeking alternative foundry opportunities for 8-inch factories. However, with the intensification of market competition, profits have become increasingly low, and even multiple Taiwanese factories have suffered losses. Therefore, TSMC has strategically chosen to gradually withdraw from the gallium nitride field.
Navitas Semiconductor, an international power semiconductor manufacturer, is a major customer of TSMC's gallium nitride foundry business. With TSMC's exit, Navitas announced a partnership with TSMC to produce gallium nitride (GaN) chips in an 8-inch factory.
Nano Semiconductor stated that TSMC's 8B factory located in Zhunan Science Park will produce gallium nitride products ranging from 100V to 650V for Nano Semiconductor. The first batch of products is expected to be certified in the fourth quarter of 2025. The 100V series products are planned to be put into production at TSMC in the first half of 2026, and the 650V products will gradually be outsourced from the existing supplier TSMC to TSMC in the next 1-2 years.
Industry interpretation shows that gallium nitride (GaN) has limited profit margins and even losses at present, while TSMC's GaN investment scale is relatively small and its profit contribution is limited. Therefore, TSMC has chosen to strategically exit and focus on high gross profit AI logic outsourcing business.
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