The world's largest foundry (semiconductor contract manufacturing) corporation TSMC is expected to mass-produce application processors (AP) for Apple's next-generation smartphone through a 2nm (nanometer, one billionth of a meter) process in the second half of this year. TSMC plans to double its production capacity for the 2nm process next year. Samsung Electronics, which has been widening the gap in market share with TSMC, is reportedly focusing on securing orders from big tech companies, including the AP Exynos 2600 designed by its System LSI division, in addition to existing orders.
On the 16th, the industry reported that TSMC's production capacity for the second half of the year for the 2nm process is expected to reach 40,000 to 50,000 wafers per month. The first product to be mass-produced using the 2nm process is the AP that will be integrated into Apple's next-generation iPhone series. Starting with Apple, plans are in place to sequentially mass-produce orders from Qualcomm, NVIDIA, AMD, and others next year, with production capacity expected to reach 90,000 wafers per month. Samsung Electronics will mass-produce the Exynos 2600 in the second half of this year and plans to focus on securing external customers based on stable yields and verified performance.
The expansion of TSMC's production capacity was anticipated. The companies that have developed advanced processes below 3nm are TSMC, Samsung Electronics, and Intel, but currently, TSMC is ahead in terms of mass production yields and technological capabilities, leading to a concentration of orders from global big tech companies. Samsung Electronics is also mass-producing the second generation of 3nm and 2nm processes, but it has been struggling to satisfy customers in terms of yield and manufacturing performance, leading to difficulties in securing contracts. Intel has also been reported to be shifting its strategy to focus on the 14A (1.4nm) process due to the lack of clients for its 18A (1.8nm) process aside from its own central processing unit (CPU) products.
For this reason, TSMC is rapidly increasing its advanced packaging (CoWoS) production capacity, which assembles products in their completed form after the 2nm process. TSMC plans to nearly double its CoWoS production capacity next year, similar to the 2nm process. TSMC's Chief Executive Officer (CEO) noted, "The demand for the 2nm process greatly exceeds that for the 3nm process," adding that "the order volume from clients for the 2nm is at an unprecedented level."
However, it has been reported that global big tech companies are seeking to diversify their supply chains through Samsung Electronics' foundry due to TSMC's limited production capacity. This is because TSMC's manufacturing costs for advanced processes are excessively high, and the limitations in production capacity might make it difficult to supply products in accordance with client launch schedules. Samsung Electronics is reportedly evaluating the mass production of the 2nm process with companies such as NVIDIA, Qualcomm, and U.S. electric vehicle manufacturers, with NVIDIA evaluating graphics processing units (GPUs) and Qualcomm evaluating application processors (APs).
A semiconductor industry insider said, "While the operation rates of existing main processes such as 4nm, 5nm, and 7nm are quite high, most are for in-house production and cryptocurrency miners, which do not carry high processing costs," adding that "to reduce losses, it will be necessary to secure 'big clients' in the relatively expensive advanced processes below 3nm."
He added, "Apple, NVIDIA, Qualcomm, and others are major clients that have placed large orders with TSMC for a long time, but other corporations are accelerating their efforts to diversify foundry services due to concerns that their mass production schedules may be delayed."