TSMC is one of the world's leading semiconductor foundries, and the company has been at the forefront of the development of advanced process nodes. The Taiwanese company has faced challenges with its 3nm technology, which has been hampered by high wafer costs. As a result, many tech companies, such as Qualcomm and MediaTek, have been discouraged from placing orders. However, Apple has been able to secure nearly all of the initial supply at a discounted price, leaving competitors in the lurch.
The situation may repeat itself with the upcoming 2nm process, where TSMC has set a wafer cost of $25,000. In contrast, 3nm wafer costs were relatively cheaper at $20,000 per wafer. Such high costs may make it difficult for early adopters to invest in TSMC's technology, which could affect their expectations for the 2nm process. However, reports indicate that clients are highly impressed with TSMC's 2nm Gate-All-Around (2 GAA) performance and yields. This has led TSMC to seek talks with several potential clients to commence mass production by 2025.
Currently, Apple and NVIDIA are the only ones placing orders for the 2nm process, leaving other competitors in the dust. With a 25% difference in costs between 2nm and 3nm wafers, most clients may opt to invest in other, more cost-effective TSMC processes. TSMC, however, is expected to develop multiple variants of its 2nm technology to appeal to more clients and obtain higher orders.
Apart from the challenges presented by high wafer costs, TSMC is expected to experience new growth waves in 2024. TSMC's 3nm wafers are being produced at a rate of 100,000 per month. This is in anticipation of the high demand for the upcoming iPhone 15. TSMC is also developing GAA technology, which is expected to help the company remain at the forefront of the semiconductor industry.
