Apple’s orders for the iPhone 15 series’ 3nm chips may boost TMSC’s revenue in the third quarter of 2023 by 11%, with a company representative estimating that the firm’s second quarter revenue will reach approximately $17 billion, according to Economic Daily News. Apple is the largest customer for TSMC and the consumer tech giant’s chip orders accounted for 23% of TSMC’s revenue in 2022, according to its yearly financial report. This proportion may be even higher this year.
Why it matters: With Apple’s new iPhone 15 series set to be released in September, industry analysts are predicting that iPhone 15 series shipments may reach 85 million units, which is 9% higher than the 78 million units of the iPhone 14 series shipped last year. This marks a growth opportunity for TSMC, as the company is the exclusive manufacturer of Apple’s 3nm advanced processor.
Details: Apple is widely expected to switch to a 3nm process for its A17 Bionic chip in this year’s flagship iPhone 15 Pro and iPhone 15 Pro Max. TSMC’s 3nm process is expected to lead to a combination of performance and efficiency improvements.
- In order to meet the mass production requirements of the new iPhone 15 series, Foxconn has been stepping up its recruitment in Zhengzhou, the central Chinese city home to its largest facility. Currently, the number of recruits per day has reached around 1,000, according to Economic Daily News. The report suggested that the peak production period will run from July to September, by which time recruitment may reach 10,000 new workers per day.
- Compared to the current 4nm process used in Apple’s iPhone 14 Pro chips, the 3nm process brings both speed and efficiency improvements. The 3nm technology is predicted to achieve a 35% power efficiency improvement and 15% faster performance compared to 4nm. Additionally, Apple’s M3 chip for new Macs and iPads is expected to use the 3nm process, according to MacRumors.
- Apple has booked nearly 90% of chip supplier TSMC’s first-generation 3nm process capacity this year for future iPhones, Macs, and iPads, according to industry sources cited by DigiTimes.
- Due to the strong demand for the 3nm process, TSMC’s 3nm production capacity is in short supply, although the company has not announced many details about its monthly production capacity. The industry estimates that TSMC’s 3nm production capacity needs to increase to 100,000 pieces per month if they want to fully meet customer demand this year.
Context: On June 23, the US Department of Commerce announced the expansion of subsidies for the Chip Act, according to the Wall Street Journal. Originally, the subsidies were only for companies building new fabs in the US, but they now include support for supply chain manufacturers such as those working in chemicals, materials, and semiconductor equipment.
- By the end of 2022, TSMC’s new production base in the US had attracted dozens of chip-related suppliers to follow suit by building factories in the area, including Dutch ASML, US Applied Materials, US Lam Research, Tokyo Electron, and Sunlit Fluto & Chemical.