Apple will have 53% of TSMC’s 5nm chip production this year, according to new estimates

Apple will have 53% of TSMC’s 5nm chip production this year, according to new estimates

by
Taiwan Semiconductor Manufacturing Company (TSMC) is the largest contract foundry in the world. You see, many of your tech giants, including Apple, Qualcomm, MediaTek and Huawei does not have the necessary facilities to manufacture chips. Therefore, these companies take their chip designs and deliver the production of these integrated circuits to foundries like TSMC and Samsung. For example, last year’s Qualcomm Snapdragon 865 was produced by TSMC using its 7 nm process node. This year’s Snapdragon 888 is being manufactured by Samsung Foundry using the latter’s 5 nm process node. After TSMC, Samsung Foundry is the second largest contract foundry on the planet.

Apple will account for 53% of TSMC’s 5nm chip production this year, says Counterpoint

On Friday, Counterpoint Research released some data based on its 2021 foundry industry estimates. Foundry industry revenue grew 23% last year, to $ 82 billion. Counterpoint shook its Magic 8 ball and is now asking for 12% growth this year bringing revenue to $ 92 billion. TSMC is expected to grow 13% to 16% this year, remaining virtually in line with the industry’s overall growth rate. Including chips ordered for other Samsung projects and those shipped to companies like Qualcomm and NVIDIA, Samsung Foundry is expected to post a 20% gain in 2021 in revenue. Boosting industry growth this year, there will be gains in wafer shipments and an increase of about 10% in similar wafer prices.

TSMC and Samsung Foundry offers high-end chips made using 5nm and 7nm process nodes. Based on the density of the transistor (the number of transistors in a square mm), the smaller the number of the process, the more powerful and energy efficient the chip is. The industry started selling 5 nm chips this year with Apple’s A14 Bionic, the first 5 nm integrated circuit found in a smartphone.

Counterpoint Research expects Apple to be TSMC’s main 5nm customer this year, accounting for 53% of production thanks to the A14 and A15 Bionic chips and the M1. The 5 nm production will represent 5% of the 12-inch wafers this year, compared to less than 1% last year. Counterpoint sees Qualcomm being responsible for 24% of TSMC’s 5 nm chip manufacturing, as Apple is expected to use Qualcomm’s Snapdragon 5G X60 modem on the iPhone 13. Both TSMC and Samsung are forecast to have 90% its 5 nm equipment set aside for 2021 with previous revenue of $ 10 billion in 5nm deals this year.

Unlike 5nm wafers, 80% of which are used for smartphones, 7nm chips are used more widely, with only 35% of the production used for smartphones. 7 nm will account for 11% of the use of 12-inch wafer this year, counterpoint projections. Both TSMC and Samsung manufacture a variety of 7 nm chips, including those made with EUV. Extreme ultraviolet lithography uses beams of ultraviolet light to record extremely thin patterns on wafers to help engineers create circuits. The use of EUV has helped smelters reduce their process nodes to the current 5nm, with volume production of 3nm starting next year.

This year, TSMC’s main customer for 7 nm will be AMD; the latter will be responsible for 27% of this production according to Contraponto. NVIDIA is next with 21%, followed by MediaTek with 10% and Intel with 7%. Yes, the latter has its own factory, but its resources are behind TSMC and Samsung Foundry when it comes to the process node. The research firm says Intel’s decision to outsource is necessary to maintain the chip maker’s long-term survival. Apple will retain 6% of TSMC’s 7 nm production this year, as it still needs 7 nm chipsets for some of its older devices.

Counterpoint notes that the largest chip stock, now up to 79 days from 70 days since 2016, is due to the pandemic, global trade battles and other problems. As a result, the chip industry will be acclimated to higher inventory levels throughout the year. Counterpoint expects the sector’s annual revenue to reach $ 100 billion by 2022-2023.

Source