Apple estimates that it will take 53% of TSMC’s 5nm chip production this year

Apple estimates that it will take 53% of TSMC’s 5nm chip production this year

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Taiwan Semiconductor Manufacturing Company (TSMC) is the world’s largest contract foundry. You see, many of your technical giants, including Apple, Qualcomm, MediaTek and Huawei does not own the facilities needed to manufacture chips. These companies therefore take their chip design and hand over the production of these integrated circuits to foundries such as TSMC and Samsung. Last year, for example, Qualcomm Snapdragon 865 was manufactured by TSMC using its 7nm process knot. This year’s Snapdragon 888 is manufactured by Samsung Foundry using the latter’s 5nm process knot. 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 has released some data based on estimates from the 2021 foundry industry. Revenue in the foundry industry rose 23% to $ 82 billion last year. Counterpoint has shaken up its Magic 8 ball and is now calling for a 12% growth this year, which will amount to revenue of $ 92 billion. TSMC should grow by 13% to 16% this year, but stays in line with the industry’s overall growth rate. Including chips ordered for other Samsung projects and those sent to companies like Qualcomm and NVIDIA, Samsung Foundry is expected to achieve a 20% increase in 2021. To spur growth in the industry this year is the increase in wafer shipments and a 10% increase in similar wafer prices.

TSMC en Samsung Foundry delivers both leading chips manufactured with the 5nm and 7nm process knots. Based on the transistor density (the number of transistors in square mm), the lower the process number, the more powerful and energy efficient the chip is. The industry has only started shipping 5nm chips this year with Apple’s A14 Bionic, the first 5nm integrated circuit found on a smartphone.

Counterpoint Research expects Apple to be TSMC’s top 5nm customer this year, accounting for 53% of production thanks to the A14 and A15 Bionic chips and the M1. The 5 nm production this year will account for 5% of the 12-inch wafers, compared to less than 1% last year. Counterpoint sees that Qualcomm accounts for 24% of TSMC’s 5nm chip manufacturing, as Apple is expected to use Qualcomm’s 5nm Snapdragon 5G X60 modem on the iPhone. Both TSMC and Samsung are expected to book 90% of their 5nm equipment by 2021, with the former gross earnings. $ 10 billion of 5nm business this year.

Unlike 5 nm wafers, of which 80% are used for smartphones, 7 nm chips are used more widely, with only 35% of the production used for smartphones. 7pm will account for 11% of 12-inch wafer usage, Counterpoint predicts. Both TSMC and Samsung manufacture a range of 7nm chips, including those manufactured with EUV. Extreme ultraviolet lithography uses UV light rays to etch extremely thin patterns on wafers to help engineers create circuits. The use of EUV has helped the foundries reduce their process nodes to the current 5nm, with production starting at 3nm starting next year.

This year, AMD will be the best customer for 7pm; the latter will account for 27% of this production, according to Counterpoint. NVIDIA is next at 21%, followed by MediaTek at 10% and Intel at 7%. Yes, the latter does have its own factory, but its capabilities are behind TSMC and Samsung Foundry when it comes to process knots. The research firm says that Intel’s decision to outsource is essential to maintain the chipmaker’s long-term survival. Apple will take 6% of TSMC’s 7MM production this year, as it still needs 7nm chips for some of its older devices.

Counterpoint notes that the higher stock slides, now up to 79 days from 70 days since 2016, are due to the pandemic, global trade battles and other problems. As a result, the chip industry will become accustomed to higher inventory levels throughout the year. Counterpoint has annual revenue in the industry of $ 20 billion by 2022-2023.

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