Chip giant TSMC is seeing increasing orders from its three major clients – Apple, Intel, and AMD – for its 3nm chips, according to Taiwanese media outlet Economic Daily News. TSMC launched its 3nm process in late 2022, but up until the fourth quarter of 2023, Apple was its only customer for the technology, as the foundry slowly ramped up its production. As that situation changes, TSMC’s revenue share from 3nm chips is expected to surpass 20% of its total this year, positioning them as the company’s second-largest revenue contributor after its 5nm chips according to the Economic Daily News report.
Why it matters: With orders for its 3nm chips from major clients continuing to rise, TSMC is expected to experience significant short-term revenue growth and cement its dominance in the advanced semiconductor manufacturing sector.
Details: The Economic Daily News has analyzed the order status of TSMC 3nm chips from three key clients: Apple, Intel, and AMD.
- The upcoming iPhone 16 series by Apple will feature the new A18 series processor, while its new Mac processor (the M4 series) is expected to launch in the first quarter of 2025. Both are 3nm chips scheduled for production by TSMC starting in the second quarter of this year.
- In the second quarter of 2024, Intel will start the mass production of Lunar Lake CPUs (central processing units), GPUs (graphics processing units), and high-speed Input/Output chips at TSMC. This marks the first time that Intel has outsourced its complete range of chips for mainstream consumer platforms to TSMC. The CPU/GPU cores may also adopt 3nm technology, representing a new source of orders for TSMC’s 3nm process this year.
- AMD this year will unveil its new Zen 5 architecture platform, which is expected to greatly enhance AI applications. The report suggests that AMD’s Zen 5 architecture utilizing TSMC’s 3nm process is scheduled for a release in the second half of 2024.
- In the fourth quarter of last year, TSMC’s revenue contribution from 3nm chips already rose to about 15%, driven by the order of the 3nm A17 Pro processor for the Apple iPhone 15 series, according to TSMC’s financial reports.
Context: TSMC has secured over 90% of the total global AI chip foundry orders, as tech giants such as Nvidia, Google, Intel, Qualcomm, Microsoft, and AMD compete fiercely in the AI chip market, Economic Daily News reported.
- Driven by the high demand for AI chips, the high utilization rates of advanced processes of 6nm, 5nm, 4nm, or 3nm will further improve TSMC’s performance, a company insider told Economic Daily News. TSMC’s revenue in 2024 may increase by 24% to 26% year-on-year, the source claimed.
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