Increasingly sophisticated wafer fab tools are needed to produce chips on leading-edge process technologies, thus intensifying costs with each new node. Analysts from International Business Strategies believe that the situation will worsen at 2nm, with chip costs growing by around 50% compared to 3nm processors, reports Nikkei, ultimately resulting in a $30,000 price tag for each wafer of 2nm chips.
IBS estimates that a 2nm-capable fab with a capacity of roughly 50,000 wafer starts per month (WSPM) costs around $28 billion, up from around $20 billion for a 3nm fab with a similar production capacity. The cost increase will be driven by the increased number of EUV litho tools required to maintain a 50,000 WSPM capacity for a 2nm-class technology. This will significantly increase production costs per wafer and per chip, which will inevitably affect companies that use leading-edge fabrication technologies, such as Apple, which is currently the only company that mass produces processors for smartphones and PCs using TSMC's latest N3B (3nm-class fabrication process).
Fascinating article about miniaturization of chips, and how the demise of Moore's law may impact global geopolitics. "gap is narrower than it ever has been between Intel and SMIC, China’s top chipmaker" https://t.co/j8AeDzFzA2 pic.twitter.com/u7mBXS1ComDecember 14, 2023
Expand the tweet above to see the relevant predictions. IBS further estimates that it will cost Apple around $30,000 to process a single 300mm wafer using TSMC's N2 fabrication process when it is introduced in the 2025 – 2026 timeframe, which is up from around $20,000 for an N3-based wafer, as estimated by IBS and some other analysts. Such a tangible cost-per-wafer increase will inevitably increase the per-chip cost by a similar margin.
However, IBS seems to be a little dramatic with its per-chip cost estimate. The company believes that Apple's current 3nm per-chip cost is around $50, but it does not define the chip's die size. Arete Research estimates that Apple's latest A17 Pro system-on-chip for smartphones has a die size between 100mm^2 and 110mm^2, which is in line with die sizes of the company's previous-generation A15 (107.7mm^2) and A16 (around 5% larger than A15, so, approximately 113mm^2) SoCs. If Apple's A17 Pro has a die size of 105mm^2, then one 300-mm wafer can fit 586 of these, which brings their cost to approximately $34 at an unrealistic 100% yield and $40 at a more realistic 85% yield.
International Business Strategies further estimates that a 2nm 'Apple chip' will cost around $85, up from $50, which implies rather low yields. At $30,000 per wafer and 85% yield, a single 105mm^2 chip would cost $60, but this is a very rough estimate.
In contrast, a projection from earlier this year indicated a cost of $25,000 per 2nm wafer at TSMC's fabs, reminding us that estimates can vary significantly.
Even with very rough estimates about 2nm fab costs and wafer costs, it is clear that chips made using a 2nm node will be more expensive than processors produced on a 3nm-class process technology. That said, expect companies like AMD and Intel to accelerate the adoption of multi-chipset designs comprised of chiplets made on different nodes in the coming years, thus defraying the costs associated with leading-edge nodes. Meanwhile, it is likely that smartphone processors will retain monolithic designs for a while as advanced packaging costs are still quite high.
