Apple’s 3nm Chip Order Maintains TSMC’s Fabrication Capacity

BY Dave Johnson

Published 9 Mar 2023

Apple M3 chip

According to a recent report, Apple supplier TSMC is working to improve its capacity utilization for 3nm process technology.

A recent DigiTimes report revealed that TSMC’s 5nm fabrication capacity began to drop in November 2022. 

The news wasn’t surprising, considering Apple reduced orders for iPhone chips by 30 percent. Since the tech giant is one of TSMC’s major partners, the Taiwanese chip maker was forced to reduce the fabrication capacity for the 5nm chips. 

Besides, TSMC is also experiencing a rapid decline in 7nm and 6nm chip orders from other manufacturers. As a result, the chip manufacturers reportedly experienced a rough first quarter in 2023. 

But it’s not all dire news. 

According to DigiTimes’s source, TSMC has managed to keep its utilization rate at 70 percent or higher thanks to Apple’s 3nm chip order. 

“TSMC continues to improve its capacity utilization for 3nm process technology, which is expected to approach 50% at the end of March,” says sources. “The foundry will also grow the process output to 50,000-55,000 wafers monthly in March, with Apple being the main customer.”

Here’s what to expect from the forthcoming chip. 

What to Expect from the First-Gen 3nm Process

Industry experts believe the first-generation 3nm process could result in 35 percent more power-efficient chips than the current A16 Bionic. Furthermore, the N3 technology could significantly boost performance over the recent 5nm chips. 

So which Apple products will get the advanced chip? 

Reports suggest the M3 chip could be manufactured on the 3nm process for power efficiency and performance improvements. So we will most likely see the technology first on Apple’s next-generation 13-inch and 15-inch MacBook Air models. Also, the A17 Bionic processor on the upcoming iPhone 15 Pro models could also be based on N3E. 

 Meanwhile, DigiTimes says orders from new AI processors from other tech giants — such as AMD and Nvidia could help TSMC avoid further decline in fab utilization.