TSMC announced 3nm mass production two days before the end of 2022, and TSMC Chairman Liu Deyin said he was not worried about customers. The industry generally believes that the first customer of 3nm technology should be Apple. However, even Apple does not have complete confidence in 3nm, which is in sharp contrast to TSMC’s attitude.
TSMC has full confidence in 3nm, but US technology companies lack confidence
Industry insiders pointed out that the Apple processor produced by TSMC’s 3nm process should be an A17 processor. It has been rumored that Apple may adopt a 3nm process to produce M3 processors, otherwise it will not become a reality because the cost of the 3nm process is too high for Apple to bear.
TSMC’s 3nm process was originally planned for mass production in the third quarter of last year, but at that time, the A16 processor tested by TSMC did not meet the performance standards, and Apple was not satisfied. Therefore, the A16 processor uses an improved N4 process with a 5nm process instead of a 3nm process. Subsequently, TSMC further improved the 3nm process. It is estimated that the 3nm process currently announced by TSMC should be the N3E process.
Liu Deyin, CEO of TSMC, pointed out that the 3nm process has a 60% increase in logic density and a 30% to 35% reduction in power consumption. However, this is just a one-sided statement from TSMC. In fact, the true level of technology will not be known until equivalent A17 processors are produced. The previous N4 process has also increased by 11%, while A16 processors produced using the N4 process claim a 15% performance improvement. However, the actual measurement of the iPhone 14 Pro has only increased by about 10%.
Although TSMC has announced the mass production of the 3nm process, Taiwanese media pointed out that the 3nm process is still improving yield. If it is used to produce A17 processors, it means that TSMC will spend at least half a year improving the yield level, indicating that the 3nm process still faces difficulties in mass production.
TSMC is full of confidence in 3nm, while American technology companies lack confidence
Although TSMC claims not to worry about customers, it is only Apple that can determine customers, and the industry expects the iPhone 15 to continue the strategy of the iPhone 14, that is, only high-end iPhone15Pro and iPhone15Pro max will use the A17 processor, and iPhone15 and iPhone15plus will continue to use the A16 processor. Therefore, the order quantity of the A17 processor will also be less than the A15 processor, while the previous iPhone 13 will all use the A15 processor.
Apple did this because the cost of advanced technology has increased dramatically. The N4 process adopted by the A16 processor is an improvement of the 5nm process, resulting in a significant cost increase; The 3nm process is a completely new and upgraded process. It is expected that the chip design cost will be twice that of 5nm, and the wafer cost will increase by 25%. TSMC thought the cost was rising and asked Apple to share the cost, but Apple refused.
Apple has its reasons for refusing to raise prices. That is, the 2022 iPhone 14 Pro uses a more expensive A16 processor. However, due to concerns about sales, the starting price has not increased. “Then the iPhone 14 Pro only went on sale for more than a month, and the price was only reduced by 600 yuan on Double 11. It can be seen that the market does not accept expensive iPhones, and consumers do not accept price increases, while Apple is certainly not willing to increase the price.”.
In fact, not only Apple is facing cost pressures, but all mobile phone companies are facing pressure due to the global phone recession. Recently, Qualcomm, another major customer of TSMC, announced that it will also reduce the price of mid to low end chips to win support from Chinese mobile phones. American analog chip and RF chip companies experienced inventory problems in the first half of 2022 and were forced to reduce prices by 90%. It can be seen that American chips are now generally under performance pressure.
American chips are TSMC’s main customers, contributing nearly 70% of TSMC’s revenue. American chips are generally reluctant to raise prices, and even demand price reductions. TSMC hopes to share the cost of American chips is not easy. Now TSMC may be nostalgic for a Chinese technology company that once contributed 14% of its revenue. At that time, due to the balance of the Chinese technology company, TSMC obtained the bargaining power and kept increasing prices. https://forum.stoneitech.com/ TSMC
Full of confidence in 3nm, but American technology companies do not have enough confidence
Faced with this situation, TSMC seems to be beginning to recognize the role of Chinese chips. While building 5nm and 3nm factories in the United States, TSMC expanded its 28nm manufacturing capacity in Chinese Mainland, undoubtedly hoping to gain more revenue from the Chinese market, balance American chips and ensure its bargaining power. However, 28nm has limited significance for Chinese chips. After all, chip manufacturers in Chinese Mainland have already mass produced 14nm. TSMC’s 28nm is not competitive, and TSMC may continue to be constrained by American chips.
