TSMC already has its sights on Advanced 2nm node as rivals try to catch up

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Silicon development is an essential factor that determines our technology performance each year. While Intel has been stuck at 14nm for quite some time, we have seen the most impressive developments in this area from the Korean tech giant Samsung. This time, however, Samsung won’t be the first one to hit the next landmark. While Samsung prepares for its 3nm technology, TSMC has received orders for its 2nm process node.

TSMC had already started to accelerate the research and development of its  2 nm node after announcing that it will be starting production of a 5 nm process in the fourth quarter of 2020. Having an R&D budget of almost 16 billion USD, It looks like researchers at TSMC a getting enough funds to accelerate this development. Although, the 5 nm node is going into production this year, and smaller nodes are already being prepared.

TSMC

The 3 nm node will most likely go into trial production in the first half of 2021. At the same time, mass production is supposed to commence in 2022. As far as the 2 nm node, TSMC recently purchased more expensive and sophisticated Extreme Ultra-Violet (EUV) lithography machines for the 2 nm node.

Due to the high costs of these EUV machines, TSMC’s capital spending o R&D will not be revisited this year, and it should remain in the $16 billion range. As for the timeline of the 2nm process devices, we have no idea when TSMC starts trial production as the node is still in development phases.

TSMC is one of the major silicon foundries right now. They work for all the big names like AMD, Intel, and even make smartphone SoCs. TSMC currently has a 50 percent market share in the tech industry due to the very reason. If this new order goes successful, TSMC will get more clients for the smaller process, which means that this market share is bound to increase in the future.

The Mysterious Client of TSMC:

A recent report stated that TSMC would use Hsinchu Baoshan as the center for the development of 2nm technology. We currently have no idea about the client that put the order for 2nm node. There are a few speculations in the air, however, and the most plausible one points towards Apple. That makes sense as we know that Apple is developing its processors from now own. Consequently, they will be looking for the best third-party foundries to accomplish that.

Back to the report, this previously mentioned Cupertino giant has also given multiple orders in the past. We yet saw reports that this party gave all of its 5nm orders to TSMC. The same thing could happen again once Apple finalizes its design for its custom 3nm SoC.

Image: Apple

On the other hand, this means an even rough time for Samsung. Recently Samsung ramped up its production after losing 5nm orders from Qualcomm to TSMC. They did so to win back the orders for the upcoming Snapdragon 875 and Snapdragon X60 orders. However, it looks like those will also go in favor of TSMC. Because of TSMC’s technological superiority as well as reliability to deliver in time. It seems like the majority of these orders will again go to TSMC, leaving Samsung empty-handed.

Digitimes says that if TSMC continues to keep winning orders at this magnitude and Samsung does not counter it with improvements like high yield or an improved node. Then we can say that Samsung will not be able to surpass TSMC at far as 2030.

With fewer orders, Samsung will also face some problems in terms of profitability. This will get even worse for the company down the road. For instance, TSMC will deliver 80 million A14 chips to Apple fabricated on the 5nm node. Which gives an idea of how far ahead TSMC is from its competitors in the market.

 

 

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