It is reported that TSMC has determined to obtain OEM orders for four new 5G iPhone processors that Apple will launch in the second half of the year, once again overpowering Samsung and taking orders for Apple’s heavyweight flagship processors. In addition, TSMC is Apple’s new iPhone processor in the second half of the year based on 5nm.

TSMC to set up a 12 billion U.S. factory and lay out a 5nm process

Not long ago, it was reported that TSMC, the world’s largest wafer foundry, announced that it would spend US$12 billion to set up a factory in the United States. As soon as the news came out, domestic public opinion was in an uproar. According to TSMC’s official website, the plant will be set up in Arizona, USA, and will use TSMC’s 5nm process technology to produce semiconductor chips, with a planned monthly production capacity of 20,000 wafers.

In terms of specific plant plans, the fab will start construction in 2021 and will start mass production of wafers in 2024. According to TSMC’s plan, from 2021 to 2029, TSMC will spend about $12 billion on this plan (including capital expenditure).

Regarding this investment plan, TSMC said that this advanced fab will not only enable TSMC to provide better services to customers and partners, but also provide TSMC with more opportunities to attract global talents. The customers here, of course, include TSMC’s largest customer, Apple, which has been a long-term OEM for Apple’s A-series SoC processors.

TSMC also stated that the decision was made because of the investment environment and outstanding talents in the United States, as well as the forward-looking investment policy of the United States.

Currently, TSMC has a fab in Camas, Washington, USA, and design centers in Austin, Texas, and San Jose, California. In other words, the planned plant in Arizona, USA, will become TSMC’s second production base in the United States.

TSMC’s 5nm mass production in the third quarter, fierce competition among 5nm manufacturers

TSMC’s 5nm process will enter mass production in the third quarter. Although orders in the second half of the year are mainly from Apple and HiSilicon, other major customers including Qualcomm, MediaTek, Xilinx, Broadcom, AMD and Nvidia have also started 5nm chip design, which is expected to enter mass production in the next 2 years . Analysts expect TSMC to achieve its 5nm revenue share target of 10% this year and set a new record of 25%-30% for the whole of next year.

Recently, there have been rumors that TSMC has lost orders from some of its competitors, including HiSilicon shifting orders for some advanced process nodes to SMIC, and Samsung foundry announcing that it will start mass production of its 5nm process, and has already secured Qualcomm and Nvidia orders.

However, industry observers generally believe that Samsung’s 5nm production capacity and output will not be able to catch up with TSMC in the second half of the year. TSMC is also confident that it will be the only chipmaker capable of mass production and supply of 5nm process chips this year.

TSMC is a leader in the 5nm process and has won all orders for Apple’s 5nm processors. Affected by the new crown pneumonia epidemic, the prospects for the second half of the year are not good. Although TSMC will start mass production of Apple’s A14 application processor and HiSilicon’s Kirin 1000 series 5G mobile phone chips in the second half of the year, at a recent investor conference, TSMC announced that its full-year revenue will increase by 15%-18%, and the second half of the year will be consolidated. Revenue from revenue will be basically the same as in the first half of the year.

However, more and more TSMC customers are designing 5nm process chips that can be mass-produced in the next two years, so TSMC will promote the 5nm process at full speed in the second half of the year and maintain a full-year capital expenditure of 15 billion to 16 billion US dollars.

According to industry sources, TSMC’s 5nm orders will “surge” next year. In addition to Apple’s A14X and A15 application processors that will use the 5nm process, HiSilicon’s next-generation Kirin 1100 series mobile chips, AI processors and server processors will also use the 5nm process.

In addition, Qualcomm’s new Snapdragon 875 5G mobile phone chip and X60 modem chip, NVIDIA’s next-generation Hopper architecture GPU, AMD’s Zen4 architecture CPU and RDNA3 architecture GPU are also mass-produced using TSMC’s 5nm process. It is rumored in the industry that Intel will also become one of the main customers of TSMC’s 5nm chips.

TSMC is transferring its advanced 7nm process to EUV (extreme ultraviolet lithography) technology, a move that is expected to solve some of the technical challenges of 7nm EUV.

Capacity has been snapped up

The 5nm process is a new generation of advanced technology in chip manufacturing following the 7nm process mass-produced in 2018. TSMC has also been developing 5nm for many years, and it started trial production last year.

Previously, a relevant person from TSMC talked about the 5nm process. At that time, he revealed that the 5nm process was progressing smoothly and would be mass-produced in the first half of this year. The mass production currently reported by foreign media in April is also within the previously disclosed mass production time range. In addition, compared with the 7nm process mass-produced in 2018, 5nm is a complete process node leap, which can theoretically increase the density of transistors by 80% and increase the speed by 20%.

The mass production of the 5nm process will also bring considerable revenue to TSMC. Industry stakeholders predict that, driven by mobile devices and high-performance computers, the 5nm production capacity will have a rapid and steady growth in the second half of the year, and it is expected to contribute this year. 10% of TSMC’s revenue.

Judging from the news announced on TSMC’s official website, they will produce 5nm chips for related customers in Fab 18. The information on TSMC’s official website also shows that the 5nm process is TSMC’s second chip process using extreme ultraviolet lithography technology. It has good imaging capabilities and is expected to have a better yield.

It is reported that in the second half of the year, TSMC’s 5nm orders are full. In addition to Apple’s new-generation A14 application processor, it also includes Huawei’s HiSilicon’s new 5G specification Kirin mobile phone chip, as well as Qualcomm’s 5G modem chip X60 and a new generation of Snapdragon 875 mobile phone chips. Most people are optimistic that TSMC’s revenue will increase quarter by quarter this year, and it should be able to successfully achieve the performance forecast target proposed at the beginning of the year.