[News] Apple is Reportedly Developing M5 Chips, Boosting Orders for TSMC’s Advanced Processes

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According to a report from Economic Daily News, while the industry is still focusing on the launch of Apple’s new products featuring self-developed M4 chips, Apple is reportedly making significant investments in the development of its next-generation M5 chips, to strengthen its position in the AI PC competition with more powerful ARM architecture processors.

Notably, the report highlighted that Apple will continue to adopt TSMC’s 3nm process, increasing orders for TSMC’s advanced processes. According to the report, it is expected that the next-generation M5 chip will be launched as early as the second half of next year to the end of the year.

In the current wave of AI PC competition, tech giants in the x86 camp, such as Intel and AMD, have launched new processors to vie for market share. Meanwhile, Apple, the market leader in the Arm camp, is accelerating its efforts to expand its presence and continue to develop next-generation self-developed chips, as indicated by the report.

According to the report, citing industry sources, Apple’s upcoming M5 chip is expected to deliver enhanced AI performance and computing power, potentially triggering a new wave of iPhone purchases. The report indicated that this will generate substantial chip foundry orders for TSMC. Plus, it will also benefit Apple’s end-product partners, such as Foxconn and Quanta.

Regarding Apple’s decision not to use TSMC’s 2nm process for the M5, the report, citing industry sources, noted that this is primarily due to the high costs. However, compared to the M4, the M5 features significant advancements, as it will utilize TSMC’s 3D chip-stacking technology, known as SoIC. This approach allows for better thermal management and reduced leakage compared to traditional 2D designs, as the report pointed out.

Apart from using TSMC’s 3nm process for chip development, the report noted, citing industry sources, that Apple has actively placed orders for TSMC’s 2nm process and the first batch of production capacity of the A16 process.

According to the report, The 2nm process is expected to be introduced as early as next year in the APs for Apple’s iPhone 17 Pro and 17 Pro Max models. As for the rumored ultra-thin iPhone 17 Air model, its AP may continue to use the 3nm process family.

Regarding clients for the 2nm process, the report noted, citing comments from TSMC’s chairman C.C. Wei during a previous earnings call, that inquiries for the 2nm process are outpacing those for the 3nm process. Additionally, the A16 process is considered highly attractive for AI server applications.

Wei noted that high-performance computing (HPC) applications are increasingly moving toward chiplet designs; however, this shift will not impact the adoption of the 2nm process. According to the report, current customer demand for the 2nm process exceeds that of the 3nm process, and production capacity is expected to be higher, as the report indicated.

According to an industrial source cited by MoneyDJ, TSMC started the mass production of 3nm in 2022, while the 2nm is expected to enter volume production in 2025, indicating that the generation cycle for a node has been expanded to three years.

Thus, supported by TSMC’s major clients, the contribution from 3nm will continue to rise next year and remain a key revenue driver in 2026, while the 2nm process is expected to replicate or even surpass the success of 3nm, MoneyDJ notes. According to previous market speculations, tech giants such as Apple, NVIDIA and AMD are believed to be the first batch of TSMC’s 2nm customers.

Read more

• [News] TSMC Says 2nm More Sought after than 3nm; A16 Attractive for AI Server Clients
• [News] TSMC’s 2nm Wafers Reportedly Set to Double in Price, Benefitting IP/ Material Companies

(Photo credit: Apple)