Apple has made a significant move in the world of chip manufacturing. It has secured all of TSMC’s 3nm production for the first year. This comes as no surprise, as Apple has always been at the forefront of utilizing the most advanced nodes offered by TSMC.
The arrangement between Apple and TSMC was detailed in a report from The Information. Apple wanted assurances that it wouldn’t be responsible for paying for defective dies on the new wafers. TSMC agreed to this condition and will only charge Apple for perfect chips. TSMC’s yields for the 3nm process are already at 70%, which is higher than previously reported.
Apple Takes the Lead with TSMC’s 3nm Chip Manufacturing 1 Year Contract
Apple’s importance to TSMC is highlighted in the report. It accounted for 23% of TSMC’s total revenue in 2022, amounting to almost $17 billion. This is a small fraction of Apple’s revenue, as it generated $81.8 billion in just the last quarter, with nearly $20 billion in profit.
With Apple’s substantial order, it will be at least a year before TSMC has any excess capacity to offer to other companies. The CEO of TSMC even mentioned that they were having difficulty keeping up with Apple’s demand.
This move by Apple is not without risks. It puts all of its faith in TSMC to deliver on the promises of the 3nm process. This process has significant improvements over the current 4nm node. Apple has also been urging TSMC to diversify its production by moving some of it to the United States. However, this comes with challenges such as higher construction costs and a shortage of skilled workers.
The iPhone 15, set to launch in late September, will potentially be the first device to showcase the capabilities of the 3nm technology. TSMC is likely to introduce the M3 chips based on 3nm process for the Mac in 2024.
Features of 3nm based Chips and Why Apple pursuing it:
- Smaller Size, Greater Density: The introduction of 3nm chips brings a significant leap in miniaturization, allowing for more transistors to be packed onto a single chip compared to previous generations.
- Enhanced Performance: These chips offer a notable boost in performance, enabling devices to handle multiple tasks simultaneously and at faster speeds.
- Improved Energy Efficiency: Devices equipped with 3nm chips should see improvements in battery life and overall energy efficiency, thanks to the ability to do more while consuming less power.
- Advanced AI and Machine Learning: The increased transistor density opens up possibilities for more advanced artificial intelligence and machine learning capabilities, enhancing tasks like image recognition and voice processing.
- Better Graphics: The potential for more advanced graphics capabilities brings exciting prospects for improved gaming experiences and graphics-intensive applications like video editing and rendering.
- Potential for Ray Tracing: These chips could support built-in ray tracing, enhancing realism in graphics and visual effects in applications and games.
- Multi-Core Performance Boost: The smaller chip size could lead to better multi-core performance, particularly beneficial for tasks that require heavy parallel processing, such as video editing and scientific simulations.
SEE ALSO: Apple M3 Launch Date Rumored for H2 2023
Apple’s decision to secure all of TSMC’s 3nm production for a year shows its commitment to staying at the forefront of chip technology. It will be interesting to see the impact of this move on the performance of Apple devices and how it shapes the future of chip manufacturing.