As AMD is ramping up production of its next-generation CPUs and GPUs, it is set to become the second largest client of TSMC's N5 (5nm-class) production node platform in the second half of 2022, according to a DigiTimes report. But will it become the foundry's second largest customer overall? If so, it would be behind Apple, but ahead of MediaTek.
AMD is set to launch a multiple new products made using various nodes that belong to TSMC's N5 family. First up, next month the company will release its long-awaited Ryzen 7000-series processors for desktops based on its Zen 4 microarchitecture. Later this year, the firm will start ramping production of its 4th Generation EPYC processors codenamed Genoa featuring the same Zen 4 microarchitecture. Also, later this year AMD plans to release its Radeon RX 7000-series graphics processors featuring its RDNA 3 architecture. While ramp up of datacenter-oriented EPYC will be fairly slow, client-oriented Ryzen and Radeon should ramp relatively quickly, so AMD will have several high-volume N5 chips in production by the end of the year.
Going into 2023, AMD is set to launch its EPYC processors codenamed Bergamo featuring Zen 4C cores for cloud native workloads in Q1 as well as EPYC CPUs codenamed Siena for telecommunications equipment later on. Both are set to be made using one of TSMC's N5 process technologies. In addition, AMD is projected to introduce its Zen 4-based Ryzen 7000 codenamed Phoenix processor for mainstream and high-performance laptops in the second half of next year.
To sum up, AMD is going to order a boatload of chips for various applications (desktops, notebooks, high-performance servers, cloud servers, telco servers) made on multiple TSMC's N5 process technologies in the next six to nine months. As a result, it may well become TSMC's second largest N5 customer if not in late 2022, but in the first half of 2023.
Readers who follow AMD closely may ask whether AMD becoming TSMC's second largest customer on N5 platform could also mean that the company is poised to become the foundry's second largest customer in general.
Based on what we know about TSMC's largest customers, AMD was somewhat behind MediaTek last December, but the gap between the companies has shrunk since then, partially due to AMD acquiring Xilinx. MediaTek tends sell boatload of system-on-chips for consumer electronics, smartphones, and tablets as well as to adopt TSMC's latest nodes more aggressively than the CPU and GPU company, which is why its spending on production is high. But MediaTek's SoCs have a very long lifespan, so they are cheap to make.
Meanwhile, AMD's N5-based product family will be very broad in terms of applications, so the volumes that the company will need will also be huge. Since TSMC charges more for N5 chips than it does for N7 products, AMD's next-generation N5 chips will be more expensive to make than its existing devices, so the company's spending at TSMC will also raise. Will it be enough to leave MediaTek behind? We do not know for sure, but AMD clearly has chances to do so.
Being TSMC's second largest customer has its benefits as it strengthens AMD's position when negotiating allocation, prices or talking about process technology customizations. Allocation is very important for companies like AMD in general and now that it has so many product lines that benefit from leading-edge nodes, it is crucial for AMD to strengthen its relationship with TSMC. Being the second largest customer is certainly a good way of strengthening ties with any foundry.