With regards to the 5nm process technology, which is the most advanced node at the moment and which entered mass production in early 2020, Apple remains the sole client utilizing TSMC’s 5nm process after U.S. sanctions prohibited chip shipment to Huawei subsidiary HiSilicon. As such, despite Apple’s wafer input orders for its in-house-developed Mac CPU and FPGA accelerators used in servers, these wafer inputs are unable to completely make up for the leftover excess wafer capacities following HiSilicon’s departure. TSMC’s 5nm capacity utilization rate for 2H20 is therefore estimated to fall within the 85-90% range. Looking ahead to 2021, in addition to Apple’s 5nm+ wafer input for the A15 Bionic SoC, trial production will also kick off for a small batch of AMD 5nm Zen 4 CPUs. These products will help maintain TSMC’s 5nm capacity utilization rate at an 85-90% range next year.
It should be pointed out that, from late-2021 to 2022, MediaTek, Nvidia, and Qualcomm will kick-start their 5/4nm mass production, while AMD will ramp up its Zen 4 CPU manufacturing. Moreover, the first batch of outsourced 5nm Intel CPUs is also expected to enter production in 2022. The enormous wafer demand from these companies have led TSMC to begin expanding its 5nm capacity. Furthermore, based on current data, Apple is highly likely to continue manufacturing its A16 SoCs with the 4nm process technology (a process shrink of the 5nm node). This may lead TSMC to further expand its 5nm capacity at that time to fulfill high demand from clients. Likewise, Samsung is also planning to expand its 5nm capacity in 2021 in response to continuing manufacturing orders from Nvidia for GeForce GPUs based on the Hopper architecture, in addition to the Qualcomm Snapdragon 885 and Samsung’s own Exynos flagship SoCs. Even so, Samsung is expected to trail TSMC by about 20% in terms of 5nm capacity.
In light of the aforementioned situations, UMC and GlobalFoundries have in recent years successively bowed out of the race for advanced process development. Excluding SMIC, which is embroiled in U.S. sanctions-related complications, only TSMC and Samsung remain in the 7nm (and below) market. With regards to the client retention of foundries, Samsung is actively expanding its 5nm capacity at its new Pyeongtaek fab after receiving major orders from Nvidia. However, as Qualcomm will likely adopt TSMC’s 4nm process technology for Snapdragon 895 manufacturing, Samsung may have only Nvidia and Samsung (LSI) remaining as its major 5nm clients. Conversely, TSMC is likely to welcome Intel as a CPU manufacturing client, in addition to the existing clientele of Apple, AMD, MediaTek, Nvidia, and Qualcomm. TrendForce believes that demand for TSMC’s 5nm process technology will remain relatively strong and stable, and the 2H22 mass production of the 3nm process will further increase TSMC’s market share.
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