Capacity of TSMC Nearing Full Production Due to Increasing Demand for 3nm and 5nm Processes
According to reports, TSMC is highly sought-after for its 3nm and 5nm processes and is now operating at almost full capacity in its production lines. The demand comes from high mobile adoption rates and High-Performance Computing clients, such as Apple, NVIDIA, and AMD.
Mobile and HPC Sectors Generate Chip Market Demand
According to Ctee, TSMC's 3nm and 5nm production lines are expected to be fully booked well into next year. Much of this capacity is tied to mobile and HPC customers, and companies are increasingly struggling to obtain the advanced chips they require.
Demand is fueled by applications of TSMC technologies all across mainstream consumer and AI products:
- Semantic Devices: Apple's A19 SoCs, next M5 chips, and newly released mobile chips from MediaTek and Qualcomm use TSMC's 3nm (N3P) process.
- PC Processors: Qualcomm's recently announced Snapdragon X2 Elite CPU is also said to be manufactured on TSMC's 3nm node.
- AI Accelerators: Other AI launches set to take place soon, such as NVIDIA's Rubin platform and AMD's Instinct MI355X, are also expected to use the same advanced process.
Possible Price Increases and Expansions in Production
The fact that 3nm and 5nm nodes are so sought after makes chips a "scarce resource," as the report notes. It may therefore prompt TSMC into price increases to regulate demand and finance the expansion of its production lines.
Such investments are significant for the establishment of new plants, particularly rumored plans to introduce the N3 process into the Arizona plant next year. High demands also explain reports of companies like Apple reserving for future capacity, such as on the forthcoming 2nm node, much in advance of the actual schedule for production.
Global Supply Chain's Mainstay in TSMC
This is the fact that TSMC plays a critical role in the global semiconductor industry today. Heavy reliance by the technology supply chain on chips produced in Taiwan motivated efforts from the U.S. administration to diversify chip manufacturing into other regions, including the United States.
