TSMC Struggles to Meet Apple’s Demand for 3nm Chips: What It Means for the Tech Industry?

Taiwan Semiconductor Manufacturing Company (TSMC) is facing challenges meeting the high demand for 3nm chips from its major customer, Apple. A report by EE Times suggests that Apple has reserved all of TSMC’s 3nm production for the current year, resulting in other phone manufacturers struggling to obtain access to the advanced technology.

TSMC, 3nm chips, Apple, demand, tech industry, phone makers

The upcoming iPhone 15 Pro and iPhone 15 Ultra are set to debut with the A17 Bionic chipset, boasting over 20 billion transistors. These two models will be the only major brand smartphones to feature a 3nm chip this year. This significant increase in the transistor count is a noticeable jump from last year’s iPhone 14 Pro devices, which utilized the 4nm A16 Bionic SoC with a transistor count of 16 billion.

Why Everyone Wants the 3nm Chips

As the process node of a chip becomes smaller, more transistors can be incorporated into it, increasing efficiency and power. However, the high cost of 3nm chip production, which includes a $20,000 expense for each silicon wafer utilized, deters most manufacturers.

Competition for Chip Supremacy

TSMC and Samsung are currently vying for dominance in the 3nm space, while Intel has revealed its plans to regain process node supremacy by 2025. Despite the competition, TSMC continues to hold the leading position among cutting-edge node foundries. This is because Samsung Foundry has not yet established a consistent leading-edge process technology, and IFS still has a few years to go before offering a competitive solution.

Tough Times for TSMC

Although TSMC is experiencing significant demand for its 3nm chips from Apple, the outlook for 2023 is not favorable, and the company’s revenue may decrease for the first time in ten years. There could be a mid-single-digit decline in year-over-year sales. Nonetheless, TSMC plans to keep capital expenditures within the $32 billion to $36 billion range, indicating the company’s ongoing investment in upcoming technologies.

Leave a Comment