TSMC Struggles to Meet Apple’s Demand for 3nm Chips, Other Phone Makers Left Behind

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Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly having trouble meeting the high demand for 3nm chips from its biggest customer, Apple. According to a report by EE Times, Apple has locked up all of TSMC's 3nm production for this year, which means that other phone manufacturers may have a hard time getting their hands on the advanced technology.

The A17 Bionic chipset, which is expected to have more than 20 billion transistors, will debut with the iPhone 15 Pro and iPhone 15 Ultra, making these two smartphones the only major brand devices to use a 3nm chip this year. This increase in the number of transistors is significant compared to last year's iPhone 14 Pro models, which were powered by the 4nm A16 Bionic SoC with a transistor count of 16 billion.

Images: Apple Store in Saket, Delhi

Why Everyone Wants the 3nm Chips

The smaller the process node, the more transistors can be fitted inside a chip, making it more efficient and powerful. However, most manufacturers do not want to pay the $20,000 price tag for each silicon wafer used in 3nm chip production.

Competition for Chip Supremacy

TSMC and Samsung are currently competing for 3nm leadership, while Intel has also announced its intentions to regain process node leadership by 2025. However, TSMC remains the leading choice for foundries in the cutting-edge node space, as Samsung Foundry has yet to demonstrate a stable leading-edge process technology, and IFS is years away from offering a competitive solution.

Tough Times for TSMC

Despite Apple's 3nm business, 2023 is not shaping up as a good year for TSMC, and revenue may fall this year for the first time in a decade. Year-over-year sales could decline by a mid-single-digit percentage point. However, TSMC expects capital expenditures to remain in the range of $32 billion to $36 billion, showing the company's continued investment in future technology.

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