TSMC is building a $20 billion facility to keep Apple as a customer

TSMC is building a $20 billion facility to keep Apple as a customer

The Taiwan Semiconductor Manufacturing Company might not exactly be a household name, but it is one of the bigger players in smartphone component manufacturing. While companies like Qualcomm, MediaTek and Apple design their own chipsets, TSMC is the one that actually manufactures them.

But there are other players in the field, too — Samsung Semiconductor and Intel are two of the bigger ones — which necessitates the near-constant need to improve and innovate upon the manufacturing process. Thus, TSMC has already laid out its roadmap all the way to 2022, when it plans to have a 3nm semiconductor production line ready for use.

Current high-end chips use a 10nm process, so this will be more than a threefold reduction in semiconductor size. The end result will be chips that are both more powerful and less power-hungry, which is always a welcome change even for the most casual of smartphone users.

But in order to produce its own a 3nm process, TSMC needs to build a plant entirely dedicated to it. And while some reports have suggested the company may be looking into building a manufacturing facility in the United States, it won't be the one dedicated to the 3nm process —  that one will be located in TSMC's home country of Taiwan.

But it certainly won't be cheap: in an interview with Bloomberg, chairman and founder Morris Chang has revealed an estimate for the price of building such a facility: $20 billion. To put this into context, this figure is pretty close to the yearly GDP of countries like Cyprus and Cambodia, making this quite an impressive figure, even if it's for the company's most technologically advanced plant ever.

Apple's latest A11 Bionic is 100% produced by TSMC

Apple's latest A11 Bionic is 100% produced by TSMC


And judging from the outside, it certainly seems like Apple has a lot to do with this decision. TSMC has been the sole supplier of Apple chipsets for several years now, making Cupertino theis single largest customer. And we've already seen that companies that get suddenly abandoned by Apple don't do particularly good, so it isn't that far-fetched to say that this new plant is a bid to keep Apple close.

But if 2022 seems too far away from now, there's at least two more generations to go through — 7nm and 5nm. The former is expected to pop up in consumers' hands starting next year, while 5nm will begin production in 2019-2020. Or in other words — don't worry, there's still something to look forward to next year.

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7 Comments

1. tangbunna

Posts: 441; Member since: Sep 29, 2016

soon, just a breath of a human, will inhale 1 millions of transistors. then it is time to have kind of semiconductor virus/bacteria.

2. worldpeace

Posts: 3091; Member since: Apr 15, 2016

Those transistors are much smaller than fine dust, but it's not like those transistor could fly around in air, they're permanently stuck in wafer, and it's not like they can do something bad to your body (yet)

3. L0n3n1nja

Posts: 1511; Member since: Jul 12, 2016

And I remember having a 130nm chip in my first desktop I built. I do wonder what happens when they can no longer shrink the process. Are we about to hit a major road block in CPU and chip development in the next decade?

4. MrShazam

Posts: 987; Member since: Jun 22, 2017

They'll probably be upgrading to nano-bio processors: https://youtu.be/xcHcNyC6O84

6. uncle_gadget

Posts: 1050; Member since: Sep 20, 2017

When they can no longer shrink the die, then they will move on to another technology like nano to get it even smaller. I think we have already peaked what can be done with the original transistor. The next step is moving to newer tech.

7. IosDroid

Posts: 117; Member since: Dec 03, 2015

From what I heard, they are researching with crystals and storing information on molecule level.

5. uncle_gadget

Posts: 1050; Member since: Sep 20, 2017

"And we've already seen that companies that get suddenly abandoned by Apple don't do particularly good, so it isn't that far-fetched to say that this new plant is a bid to keep Apple close." It is too far fetched, just not to you. Apple may be their biggest customer, but not their only customer. The years Samsung didn't produce chips for Apple, they did just fine. In fact they did better because Qualcomm chimed in and use Samsung. Apple may be Samsung largest customer, because Apple uses multiple components from Samsung, but when Apple used other OEM's for stuff, Samsung didn't suffer any loses. Company's like the makers of the PowerVR, failed after Apple left because they had all their eggs in one basket. if they had made their products available to others and had other customers, than losing Apple wouldn't have been a big deal. But if 70%+ of your revenue is form one OEM, then that's just stupid and poor business planning and they deserved what happened to them. TSMC maybe just wants to get a headstart on the bigger OEM's like Samsung, because Samsung doesn't have to rush to jump on this process. Because TSMC doesn't have the yield capability of Samsung nor the money and resources as Samsung does.

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