TSMC will retire its smallest wafer line and reorganize several legacy fabs in Hsinchu as part of a cost and efficiency drive. TSMC plans to discontinue production on 6-inch 150 mm wafers within two years and consolidate its 8-inch 200 mm capacity, enabling machines and staff to operate more efficiently. The company has begun winding down its gallium nitride foundry services , which relied on some 200 millimeter lines, and will repurpose the affected buildings for other production or research purposes. Taiwanese media identify Fab 2 and Fab 5 among the sites expected to stop regular production by 2027. TSMC says it will work with customers to migrate production to nearby 200 millimeter facilities and to encourage longer-term moves to larger 300 millimeter processes in its gigafabs, where volume economics are stronger.

The business reasoning is very simple. Smaller wafers yield far fewer dies per cycle and cannot match the economics of modern nodes designed for AI and other high-performance markets. By consolidating older lines, the company can free capital and talent to expand advanced node capacity and increase utilization at larger fabs, including the long-operating Fab 12 and the new construction across the street. Some 200 mm factories will absorb displaced work, depending on their equipment and customers' decisions. For suppliers and product teams, the change means negotiated ramp schedules, possible redeployment of tools, and a shorter runway for products based on 150 mm platforms.