There is a huge rush for TSMC’s 7nm and 5nm manufacturing processes. With Huawei out of the picture, it’s now Apple, Qualcomm, Nvidia, and MediaTek battling for space. According to recent reports, these companies have increased their inventory which further loads TSMC5nm and 7nm process capacity. As of now, it can not take any order on these processes until the second half (H2) of next year.
According to reports, in response to strong demand for the 5nm process and tight production capacity, TSMC continues to increase its production capacity. The monthly production capacity has accelerated from the previous 80,000 units to 100,000 units. Also, the mass production yield rate has jumped sharply relative to the 7nm process.
However, due to the continuous expansion of production targets by customers, some orders have been queued up until the second half of 2021 under the continuous short supply. In addition, TSMC’s main 7-nanometer and other advanced manufacturing processes continue to benefit from strong demand for new server and game console products and new platform applications. These areas are a major driving force for steady contributions from Q4 2020 to H2 2021.
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Samsung may take-over Apple M1 chip production
Reports out of South Korea claim that due to TSMC’s tight production schedule, Samsung maybe Apple’s option for the M1 chip. If this happens, Apple will be using Samsung for the first time in five years.
South Korean media, Business Korea, reported that Apple initially handed over all M1 processors to TSMC. However, analysts pointed out that TSMC is currently unable to meet all of Apple’s needs. We all know that Samsung and TSMC are the only two manufacturers in the world that can produce 5nm chips.
A researcher from NH Investment & Securities pointed out that Apple’s M1 chip orders account for about 25% of TSMC’s 5 nm process capacity. However, TSMC already moved most of its 5nm capacity to Apple’s foundry (iPhone 12’s A14 chips). There are expectations that Apple will transfer orders that TSMC cannot satisfy to Samsung’s foundry for processing.
Apple has stopped entrusting chip orders to Samsung’s foundry since 2015 and is completely dependent on TSMC. Some analysts said that TSMC’s packaging technology is better than Samsung. Apple also feels uneasy about entrusting the chip to its smartphone rival. It will be a huge boost for Samsung if it can get the Apple M1 chip production.