TSMC’s 2nm Era Is Accelerating With MediaTek. Nvidia And Alphabet Already Have Money On The Table

MediaTek launched its Dimensity 9600 Pro on September 15 using Taiwan Semiconductor Manufacturing Company Limited (TSM) 2-nanometer technology, putting TSMC’s newest node into a flagship mobile chip. MediaTek also has $3.5 billion of financing from NVIDIA Corporation (NVDA) and a broader Nvidia partnership spanning custom AI chips, PCs and automotive. The smartphone launch is another sign that TSMC’s 2nm ramp is broadening across flagship mobile silicon.

TSMC Gets Volume, Then Pays the Ramp Cost

The Dimensity 9600 Pro uses TSMC’s most advanced process, while MediaTek says its neural processor delivers 51% higher LLM prefill performance than the previous generation. MediaTek had already taped out a TSMC 2nm design last year, and the first smartphones using its new chips are expected soon. The company has previously supplied flagship customers including Xiaomi (XIACY), Oppo and Vivo. That broadens the 2nm demand story beyond Apple (AAPL)-class customers and high-performance computing.

Taiwan Semiconductor Manufacturing Company Limited is already seeing the node show up financially. Two-nanometer contributed 3% of wafer revenue in Q2, and management expects a steep ramp in the second half. The bull case is straightforward: strong 2nm adoption supports years of leading-edge pricing and utilization. The bear case arrives first in margins. TSMC said the 2nm ramp could dilute second-half gross margin by 3 to 4 percentage points even as demand remains strong. Insider Monkey tracked 249 hedge funds long TSM in Q2 2026, up from 234 in Q1; Fisher Asset Management increased its shares 2%.

Nvidia Bought a Seat at MediaTek’s Table

NVIDIA Corporation invested $3.5 billion in MediaTek convertible bonds on August 31 and expanded a partnership that will connect MediaTek custom XPUs to Nvidia’s NVLink Fusion rack-scale systems. Alphabet (GOOGL) also participated in MediaTek’s $3.9 billion bond sale, while Reuters reported MediaTek’s first accelerator for a major U.S. cloud customer is due for mass production in late 2026.

For Nvidia, this can turn custom silicon from a substitute into part of its platform. If hyperscalers build more in-house accelerators, NVLink Fusion lets Nvidia monetize the surrounding rack architecture and ecosystem. The risk is equally visible: MediaTek is becoming a more credible custom-chip supplier, and custom accelerators can take workloads that might otherwise run on Nvidia GPUs.

Insider Monkey’s database showed 285 hedge funds with reportable NVDA longs in Q2, up from 275 in Q1. Fisher Asset Management raised its position 3%. On August 31, 298.30 million Nvidia shares were short, 1.29% of float, with 2.1 days to cover.

The cleaner bet is TSMC because it can manufacture both GPU and custom-silicon winners. Nvidia’s MediaTek investment is strategically smart, but it partly hedges a competitive shift rather than eliminating it.