TSMC is forced to slow down the development of 3nm production because of Intel. She was supposed to become her main customer, but in the end she postponed the release of her 3-nanometer chips for a year and a half ahead. Now TSMC is relying only on Apple, but Apple is not yet able to book all of its production capacity. As a result, the global mass transition to 3nm is delayed – TSMC is reducing investment in new production.
Intel ruined everything
Intel violated TMSC, the largest contract chip vendor, to expand 3nm production, TrendForce writes. This is the most modern technical process at the beginning of August 2022.
Intel was supposed to become one of TSMC’s main customers for the production of chips with this process technology. It was originally planned that the pipeline would start operating in the second half of 2022, but Intel moved all the deadlines forward by a year, that is, to the second half of 2023.
Intel was going to entrust TSMC with the production of integrated graphics for Meteor Lake processors. In them, the GPU is implemented as a separate chip on a substrate. The reasons for the transfer are related to a number of technical problems on the Intel side. Apparently, the company, which deserted from the Russian market not so long ago, is not able to solve them as soon as possible – a few days ago it postponed the production of GPUs for Meteor Lake to the end of 2023. Moreover, there is no guarantee that the situation will not repeat itself in the future .
The consequences were not long in coming
Intel’s actions have resulted in the almost complete release of TSMC’s 3nm manufacturing capacity for most of 2023. Currently, there is not a single chip designer in the world, except for one company that is ready to take the place of Intel – even Qualcomm and MediaTek, at the end of 2021. the first in the world to release 4nm CPUs, are not yet ready for the transition to 3nm.
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AMD, Intel’s main competitor in the x86 processor segment, is also in no hurry to master 3 nm. Its current CPUs are produced at 7nm standards – it, along with MediaTek and Qualcomm, wants to switch to a new process technology at least in 2024.
Thus, TSMC has only one “tenant” of the 3-nanometer pipeline left – Apple. But she still cannot book all the free capacities.
Apple has now ordered part of TSMC’s manufacturing capacity for the second half of 2022 and all of 2023. It will have new M-series processes for laptops, PCs and possibly tablets in 3nm, as well as an A17 CPU for upcoming iPhone models.
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Apple’s order volumes for 3nm manufacturing are unknown. However, according to TrendForce, due to Intel, TSMC is now forced to cut costs for its development in this direction. This may be fraught with a loss of leadership, because its main competitor, the Korean company Samsung, is moving very quickly towards 3 nm.
Need a little patience
According to TrendForce, only 2023 will be difficult for TSMC. In 2024, all the main players in the CPU market will have already switched to 3 nm, and then it will no longer have to rely on Apple alone and endure the constant delays of Intel.
According to TrendForce analysts, even in 2023, TSMC will be able to increase its revenue against the background of 2022, although the difference will not be as significant. For 2024, forecasts are much more optimistic.
It should be noted that Intel is postponing the launch of Meteor Lake GPU production at TSMC factories at all because it plans to establish it at its own factories. Indeed, Intel is also a semiconductor manufacturer, but not only does it lack a 3nm assembly line, but even 5nm and 7nm.
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Currently, Intel can produce a maximum of 10nm chips. But she compensates for the gap from competitors by luring their customers. For example, in the summer of 2022, Intel became a contract manufacturer for the first time in history, and its first third-party customer was MediaTek, a longtime customer of TSMC.