Benefited from frequent orders from its top three clients, Apple, Intel, and AMD, strong momentum has reportedly been driven for TSMC’s 3-nanometer orders, as per a report from Economic Daily News. Anticipated to see sequential growth throughout the year, these orders are expected to remain robust until the end of the year, positioning TSMC as a leader in the semiconductor industry’s recovery.

TSMC has a longstanding policy of not commenting on customer order dynamics. However, it is cited in the report that in the fourth quarter of last year, 3-nanometer orders accounted for approximately 15% of its revenue. With the adoption of 3-nanometer production by major clients this year, revenue from 3-nanometer orders is expected to surpass 20%, becoming the second-largest revenue contributor, following only the 5-nanometer process.

Looking at the orders placed by the top three clients for the 3-nanometer process, Apple is set to introduce the A18 series processor in its iPhone 16 lineup this year. Additionally, the latest self-developed M4 chip for laptops will also be produced by TSMC using the 3-nanometer process, starting in the second quarter.

On the Intel side, the Lunar Lake central processor, graphics processor, and high-speed IO chip are all confirmed to begin mass production at TSMC in the second quarter. This marks Intel’s first instance of outsourcing its entire mainstream consumer platform chip series to TSMC, making it a significant new source of orders for TSMC’s 3-nanometer process this year.

AMD, on the other hand, is poised to unveil its new Zen 5 architecture platform under the code name “Nirvana” this year, expected to significantly enhance AI applications. Following its customary practice, AMD will utilize TSMC’s wafer foundry services, with production set to commence on the 3-nanometer process and an expected launch in the latter half of the year.

TSMC, reportedly, is expanding its production capacity for the 3nm family and advanced packaging this year to meet the large orders from major clients such as Apple, NVIDIA, and AMD in the coming years.

As per TrendForce’s data, the 3nm process alone contributed 6% to TSMC’s Q3 revenue, with advanced processes (≤7nm) accounting for nearly 60% of its total revenue.

Read more

• [News] Apple Reportedly Places Large Orders for TSMC’s 3nm While Simultaneously Securing Significant Advanced Packaging Capacity
• [News] TSMC Reportedly Attracts Influx of 3nm Customers, Predicts Production Capacity Utilization to Surge to 80% by Year-End

(Photo credit: TSMC)

As the demand for AI is becoming urgent, according to industry sources cited by the ChinaTimes News, TSMC’s Fab20 P1 plant in Hsinchu’s Baoshan area will undergo equipment installation engineering in April to warm up for mass production of the GAA (gate-all-around) architecture.

Reportedly, it is expected that Baoshan P1, P2, and the three fabs scheduled for advanced process production in Kaohsiung will all commence mass production in 2025, attracting customers such as Apple, NVIDIA, AMD, and Qualcomm to compete for production capacity.

Regarding this rumor, TSMC declined to comment.

Per the industry sources cited by the same report, whether wafer manufacturing is profitable is depending on the yield after mass production. The key lies in the speed at which the yield improves; the longer it takes and the higher the cost, the more challenging it becomes.

As per the same report, TSMC is said to be accelerating its entry into the 2-nanometer realm in April, aiming to shorten the time required for yield improvement in advanced processes. This move not only poses a continuous threat to Samsung and Intel but also widens TSMC’s leading edge.

Industry sources cited by the ChinaTimes’ report have revealed that TSMC has prepared for first tool-in at P1, with trial production expected in the fourth quarter this year and mass production in the second quarter of next year. Equipment manufacturers indicate that they have already deployed personnel and conducted preparatory training in response to TSMC’s customized demands.

As a new milestone in chip manufacturing processes, the 2-nanometer node will provide higher performance and lower power consumption. It adopts Nanosheet technology structure and further develops backside power rail technology. TSMC believes that the 2-nanometer node will enable it to maintain its technological leadership and seize the growth opportunities in AI.

In fact, the cost of producing 2-nanometer chips is exceptionally high. Per the report citing sources, compared to the 3-nanometer node, costs are expected to increase by 50%, with the per-wafer cost reaching USD 30,000. Therefore, the initial adopters are expected to be smartphone chip clients, notably Apple.

Previously, per a report from the media outlet wccftech, Apple’s iPhone, Mac, iPad, and other devices will be the first users of TSMC’s 2nm process. Apple will leverage TSMC’s 2nm process technology to enhance chip performance and reduce power consumption. This advancement is expected to result in longer battery life for future Apple products, such as the iPhone and MacBook.

Unlike with the 3-nanometer node, the complexity of the design means customers must start collaborating with TSMC earlier in the development process. Market speculations suggest that many clients such as MediaTek, Qualcomm, AMD, and NVIDIA have already begun cooperation. TSMC’s earnings call also emphasized that the number of customers for N2 is higher than that for N3 at the same stage of development.

The Fab 20 facility is expected to begin receiving related equipment for 2nm production as early as April, with plans to transition to GAA (Gate-All-Around) technology from FinFET for 2nm mass production by 2025.

The competition in the development of 2-nanometer technology is fierce. ASML plans to produce 10 2-nanometer EUV lithography machines this year, with Intel already reserving 6 of them. Additionally, Japan has mobilized its national efforts to establish Rapidus Semiconductor Manufacturing, which also aims to compete in the 2-nanometer process.

Read more

• [News] Intensified Competition in the Semiconductor Industry for 2nm Technology Dominance, Potentially Reshaping the Global Foundry Market
• [News] TSMC’s Primary Client for 2nm Chips Expected to be Apple, Set to Debut with iPhone 17 Lineup Next Year

Shortly after the release of the MacBook Air with the built-in M3 chip, a report from MacRumors has cited the report that Apple is already working on the development of the next-generation M4 chip, expected to be launched next year.

As per Mark Gurman revealed in a Q&A with Bloomberg, Apple has officially commenced the development of the M4 chip, which is expected to debut alongside the next-generation MacBook Pro. Reportedly, there’s a possibility that the M4 chip may adopt TSMC’s 2nm process. TSMC’s related process is scheduled to undergo first tool-in this year and commence mass production next year.

As per MacRumors’ report, following the introduction of the first in-house developed M1 chip by Apple in November 2020, Apple has consistently pursued chip upgrades. In June 2022, Apple unveiled the M2 chip, followed by the release of the M3 chip at the end of October last year.

With approximately a year and a half gap between each generation of chips, it is speculated by MacRumors that Apple will unveil the M4 chip in the first half of next year. Some sources cited in the report also believe that Apple’s accumulated experience in chip development in recent years may enable them to shorten the development timeline, potentially leading to the announcement of the M4 chip by the end of this year.

However, compared to the 3nm process used in the M3 chip, the 3nm process of the M4 chip could be an upgraded version, with improvements in both computational capability and energy efficiency.

During the earnings call in the fourth quarter of 2023, TSMC announced that its 2-nanometer process (N2) would utilize Nanosheet transistor structures and is anticipated to commence mass production in 2025, so the M4 chip may still adopt the 3nm process.

As for TSMC’s 2-nanometer process, a previous report from wccftech has indicated that Apple is expected to adopt the 2nm process for chip production in the iPhone 17 by 2025.

Read more

• [News] The Imminent Arrival of 2-Nanometer Advanced Process
• [News] Apple Reportedly Places Large Orders for TSMC’s 3nm While Simultaneously Securing Significant Advanced Packaging Capacity

(Photo credit: Apple)

As per a report from TechNews, Apple’s pivot into AI, abandoning its “Project Titan” for electric cars, signals a shift towards Generative AI. The report further cites sources indicate that Foxconn may provide AI servers to Apple and is currently in testing phase.

Regarding this matter, Foxconn responded with no comment on individual clients or products.

According to reports from Economic Daily News, Apple has conducted extensive AI feature testing and, given Foxconn’s global leadership in server manufacturing, it has emerged as Apple’s preferred partner for the AI project.

In addition to Apple, during a recent financial conference, Dell’s COO, Jeff Clarke, disclosed that NVIDIA is set to launch a new generation server GPU, “B200,” based on the Blackwell architecture in 2025. Notably, this revelation wasn’t part of NVIDIA’s product roadmap released in October 2023, and the company has not officially mentioned this product. 

Currently, the H100 utilizes TSMC’s 4-nanometer process technology, with Foxconn securing approximately 90% of the assembly orders last year. While the fabrication process for the B100 and B200 chips remains unconfirmed, industry expectations cited by the report have pointed to the 3-nanometer process.

Previously, media speculation cited by the report from Commercial Times stated that although the B100 chip boasts computational power at least twice that of the H200 and four times that of the H100, still, B100’s tenure in the market is anticipated to be short-lived, with the B200 emerging as the mainstream product. It is rumored that Foxconn Industrial Internet will handle the manufacturing for the B200.

Foxconn’s Chairman Young Liu previously indicated a strong demand for AI servers, with Foxconn securing new projects continuously.

Foxconn spokesperson James Wu noted that Foxconn Group commands over 40% market share in the server industry, particularly in the mid-to-high-end products related to AI servers. Foxconn closely collaborates with customers and aims to maintain its dominance, anticipating substantial contributions once the entire supply chain stabilizes.

Read more

• [News] Dell Leak Reveals NVIDIA’s Potential B200 Launch Next Year
• [News] SK Hynix Announces Complete Sales of HBM for the Year, Memory Market Poised for Recovery

(Photo credit: Foxconn)

Despite the ongoing intensity of the US-China tech war, Apple has been gradually leaning towards a more diversified supply chain, especially in the production of its latest head-worn device, Vision Pro. As per a report from Commercial Times, upon examination, it is revealed that the major supplier in chip manufacturing for this device is Texas Instruments (TI).

However, other components, such as the NOR Flash memory, originate from Chinese manufacturer GigaDevice, with the assembling being shifted from Taiwan-based facilities, previously relied upon, to Luxshare Precision.

On February 7th, following an in-depth teardown of internal components by the repair website iFixit, it was discovered that within the Vision Pro main unit, speakers, and external power supply, there are not only Apple’s self-developed processor chips but also multiple Apple-designed power management chips. It’s noteworthy that TI serves as the primary chip supplier in the Vision Pro.

Yet, surprisingly, there are NOR Flash from the Chinese memory manufacturer GigaDevice. As the US-China tech war continues to escalate, Apple’s use of memory from a Chinese manufacturer raises concerns in the market about whether it may cross the red line set by the US government.

In fact, in recent years, Apple’s products such as the iPhone, MacBook, iPad, Apple Watch, and AirPods have leaned towards Chinese suppliers like Luxshare, Wingtech, BYD, and GoerTek in the assembling sector, while Taiwanese suppliers like Foxconn, Quanta, Pegatron, and Compal, which Apple used to heavily rely on, are gradually fading out of the supply chain.

The assembly for Vision Pro has also shifted from Pegatron to Luxshare. While Taiwanese suppliers are gradually reducing their reliance on Apple, they are simultaneously diversifying into emerging fields such as artificial intelligence, electric vehicles, and smart healthcare.

On the other hand, despite the strong sales of Vision Pro since its launch in the United States in mid-January, reports surfaced of a wave of returns within just two weeks. The most cited reasons by consumers include discomfort when wearing, eye fatigue, and unsatisfactory software experiences, prompting buyers to opt for returns within the 14-day return window.

Some early adopters also expressed that the current productivity and entertainment experiences offered by Vision Pro do not justify its high price point. Additionally, they find its interactive features insufficiently convenient for tasks such as programming, design, and presentation editing.

TrendForce has previously reported that one of the main issues impacting the Vision Pro is its hefty price tag. The $3499 price point, although seemingly steep, is expected to resonate with the market, especially given the promise of ample applications, a quality user experience, and Apple’s established brand loyalty.

Additionally, should Apple introduce a more budget-friendly version as speculated, the premium pricing of the Vision Pro could serve to accentuate the value proposition of the more economical model, potentially driving consumer interest towards it.

Read more

• 2024 Apple Vision Pro Shipments Estimated Between 500–600 Thousand Units, Micro OLED Key to Cost and Volume, Says TrendForce
• [News] Market Rumors Suggest Apple Vision Pro Stock Limited to 60-80K Units, Expected to Quickly Sell Out Post-Launch

(Photo credit: Apple)