Qualcomm, MediaTek expected to join Apple as customers for TSMC’s second-gen 3nm node in 2024،
As we have had the opportunity to mention several times, TSMC’s first 3nm process node, N3B, is only used by one of its customers. If you guessed Apple, you’re right! Only the iPhone 15 Pro and iPhone 15 Pro Max are powered by a 3nm Application Processor (AP) which is the A17 Pro. By China Times (via Wccftech), Apple was able to reserve most of TSMC’s 3nm production this year because 3nm wafer prices are $20,000 a piece and yields are 55%, leaving Apple as the only company willing to pay the admission price.
But in August, Information said that TSMC’s 3nm yield was 70%, and Apple enjoyed a sweetheart deal with TSMC. Usually, the fabless company that designs a chip (which is Apple in this example) is responsible for paying the foundry for defective dies unable to pass quality control. Information said TSMC was absorbing the cost of defective chips produced by Apple using TSMC’s N3B node. This could save Apple several billion dollars.
The A17 Pro chipset is the only 3nm application processor found on a smartphone this year
China Times reports that TSMC currently produces 60,000 to 70,000 wafers per month for 3nm chips, but that number is expected to reach 100,000 per month by the end of next year. Part of the increase will come when Qualcomm and MediaTek sign up for the second-generation 3nm N3E node, which is not expected to cost as much as N3B. Both the Snapdragon 8 Gen 4 and AP Dimensity 9400 are expected to be produced next year with N3E. 3nm production could account for 10% of TSMC’s revenue in 2024, double this year’s 5%.
In 2023, the A17 Pro and M3 chips are expected to generate $3.1 billion in revenue for TSMC. Apple is spending a lot of money to become a leader in the 3nm field. A report earlier this month stated that the cost for Apple to register the 3nm M3, M3 Pro and M3 Max chipsets was $1 billion. Tape-out is the last part of the chip design process before manufacturing begins. With costs like that, it’s easy to see why Qualcomm and MediaTek allowed Apple to have the first crack at 3nm this year.
But next year it will be different.
