TSMC continues to keep up the pace with its transition to smaller process nodes. According to JK Wang (opens in new tab), the company's senior vice president for fab operations, TSMC is on track to start 5nm commercial production in the second half of 2020, while it’s also expected to start 3nm volume production in 2022.
TSMC expects 5nm orders to ramp up next year as mobile phone vendors try to sell more efficient chips with integrated 5G modems. As 5G modems require more power (opens in new tab) to deliver the promised 1Gbps and beyond speeds, the chip makers will need all the efficiency gains they can get from moving to a smaller process node.
However, things might not be so rosy for TSMC as Chinese fabless chip companies have started to slow down their orders to TSMC, as their own customers (device makers) have started doing inventory checks for the year.
The phone vendors would like to ship more 5G devices in 2020, but it looks like some of them are seeing a supply shortage of OLED displays, hindering their ability to ship as many devices as they would’ve liked. This has spill-over effects that affect the Chinese fabless chip makers, which are now expected to see lower revenues for November and December.
Fortunately for TSMC, one of its largest customers, Apple, intends to launch not one but four 5G iPhone models (opens in new tab) in the second part of 2020, according to recent leaks. Apple will supposedly also use the 5nm process (opens in new tab) to manufacture its next-gen systems-on-chip, too.