Roger Luo, president for TSMC Nanjing said the new facility is set to begin pilot production in the first half of 2018 followed by volume production in the second half of the year.

TSMC's Nanjing fab will directly enter 16nm production with target production capacity of 20,000 wafers monthly.

The company will start taping-out 7nm production for its customers in the second half of 2017, Luo said. The foundry has already moved its 10nm process technology to volume production, Luo added.

TSMC uses ASML's latest EUV system, the NXE:3350B EUV, and has demonstrated the capability to process 1,500 wafers a day for three consecutive days, he added.

TSMC co-CEO Mark Liu has previously claimed that the foundry will start using extreme ultraviolet (EUV) for an improved version of its 7nm process technology, and fully implement the lithography to make 5nm chips.