TSMC is known as the sole manufacturer of "Apple Silicon," the heart of Apple devices, and is also known for always supplying its most cutting-edge processes to Apple on a priority basis. Now it has come to light that TSMC is accelerating development to ensure a stable supply of its cutting-edge 2nm process chip, tentatively called the "A19," which is expected to be used in the 2025 iPhone 17 series.
Are Yield Concerns Behind TSMC's Accelerated 2nm Process Development?
TSMC is set to begin trial production of 2nm chips starting next week at its Baoshan fab in the Hsinchu Science Park in northern Taiwan. Initially, industry observers expected trial production of the 2nm process to begin no earlier than the fourth quarter of 2024, but TSMC has significantly moved up its schedule to start in July. Behind this early start is TSMC's intent to secure stable yields before mass production begins.
The 2nm process is expected to significantly improve chip performance and power efficiency. TSMC plans to introduce GAA (Gate All Around) transistor technology and BSPDN (Backside Power Delivery Network) technology with this process. Thanks to these technological innovations, devices equipped with 2nm chips are expected to achieve a 10-15% performance improvement and up to 30% reduction in power consumption compared to chips using the current 3nm process.
There are also reports that Apple may have reserved all of TSMC's 2nm chip production capacity. This appears to be part of the traditional cooperative relationship between Apple and TSMC, similar to the strategy Apple reportedly employed with the 3nm "N3B" process adopted for the A17 Pro chip in 2023. This move suggests that Apple intends to exclusively use 2nm chips in products scheduled for release from 2025 onward, including the iPhone 17 series and next-generation Macs equipped with the M5 chip.
The success of TSMC's 2nm process development could have a major impact on the smartphone and computer industries. In particular, demand is expected to increase in the fields of artificial intelligence (AI) and high-performance computing (HPC), and TSMC is expanding its production capacity to meet this demand.
However, introducing new process technology always comes with challenges. Improving yield rates in particular is a critical issue. TSMC reportedly struggled with yield rates of around 50% initially when producing 3nm chips, and it may face similar challenges with the 2nm process as well.
This latest move by TSMC reflects the fierce competition and rapid pace of technological innovation in the semiconductor industry. Regarding the 2nm process, Samsung—having learned from its inability to secure orders with its 3nm process—is also accelerating development and working to win orders. Just yesterday, it was announced that Samsung had secured an order for AI chips from Japan's Preferred Networks. The battle for orders is likely to be especially fierce for AI chips using the 2nm process.
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