Discussion Leading Edge Foundry Node advances (TSMC, Samsung Foundry, Intel) - [2020 - 2025]

[DisEnchantment]

TSMC's N7 EUV is now in its second year of production and N5 is contributing to revenue for TSMC this quarter. N3 is scheduled for 2022 and I believe they have a good chance to reach that target.


N7 performance is more or less understood.


This year and next year TSMC is mainly increasing capacity to meet demands.

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For Samsung the nodes are basically the same from 7LPP to 4 LPE, they just add incremental scaling boosters while the bulk of the tech is the same.

Samsung is already shipping 7LPP and will ship 6LPP in H2. Hopefully they fix any issues if at all.
They have two more intermediate nodes in between before going to 3GAE, most likely 5LPE will ship next year but for 4LPE it will probably be back to back with 3GAA since 3GAA is a parallel development with 7LPP enhancements.

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Samsung's 3GAA will go for HVM in 2022 most likely, similar timeframe to TSMC's N3.
There are major differences in how the transistor will be fabricated due to the GAA but density for sure Samsung will be behind N3.
But there might be advantages for Samsung with regards to power and performance, so it may be better suited for some applications.
But for now we don't know how much of this is true and we can only rely on the marketing material.

This year there should be a lot more available wafers due to lack of demand from Smartphone vendors and increased capacity from TSMC and Samsung.
Lots of SoCs which dont need to be top end will be fabbed with N7 or 7LPP/6LPP instead of N5, so there will be lots of wafers around.

Most of the current 7nm designs are far from the advertized density from TSMC and Samsung. There is still potential for density increase compared to currently shipping products.
N5 is going to be the leading foundry node for the next couple of years.

For a lot of fabless companies out there, the processes and capacity available are quite good.

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[Geddagod]

What's a sweetheart deal to 'the rest of you'? In an economic reality where companies left and right use inflation to push hidden price rises for even higher margins?

Pulling from merriam webster "an unusually advantageous arrangement or agreement"
For example- nvidia going over to Samsung for 8nm was almost certainly a sweet heard deal, considering that Nvidia likely paid drastically lower prices for their chips produced in Samsung compared to those at TSMC. Samsung likely offered Nvidia a sweet heart deal because they knew Nvidia would buy up a lot of wafers, so even if the margins were lower, it would be an important customer design win and also a large volume customer.
TSMC offering 'only working' chips to Apple isn't "an unusually advantageous arrangement or agreement", IMO, because yields for their 3B process is unusually worse than expected. The deal Apple is getting right now is likely the deal they would have gotten if 3nm yielded as normal, but it seems to be not. Yes, TSMC can just screw them over, but as I stated before, that would greatly hurt the two companies business relationship, a risk TSMC would almost certainly not want to take, considering Apple is nearly a quarter of their total revenue.
At the end of the day, Apple gets the deal they should have gotten all along if TSMC N3B wasn't yielding so poorly. I wouldn't be surprised if a clause might have even been included in the contract stating that if a certain level of yields weren't hit, TSMC would have to sell them per working chip anyway. It's not an especially advantageous deal for Apple.

 

[moinmoin]

It's not an especially advantageous deal for Apple.

Agree to disagree then.

 

[scannall]

That's a sweetheart deal. What is Apple going to do, go to Samsung?

I wouldn't call that a sweetheart deal. But Apple could and likely will at some point fab their own chips. It's the Apple way. The big sticking point there is ASML though. Lots of fabs, both big and small. Same with material providers. But only one provider in the entire world capable of making the equipment. And they are backlogged for years. The way these machines work is insane. And there is probably ground Unicorn horns and chicken feet involved in there somewhere.

 

[SpudLobby]

What's a sweetheart deal to 'the rest of you'? In an economic reality where companies left and right use inflation to push hidden price rises for even higher margins?

"Use inflation to push hidden price rises"

Please.

 

[Doug S]

This is getting OT and into P&N territory so I'll stop after this one time: Apple is a big lobby pro China due to it being a major market for them. Even though it's a country that is getting dangerously close to Russia and may well end up facing similar far reaching economic sanctions if they proceed as is.

They are merely trying to walk the tightrope of not pissing them off so they don't get their products banned - which could very easily happen as part of the tit for tat trade war. So long as China feels they are getting the better end of the deal w.r.t. Apple's economic activity in China they will leave them out of the fight. Apple has been working to move some of their supply chain out of China, mostly to India which they consider their next major growth market. But over the past quarter century most of the electronics supply chain has been moved to China, so this is something Apple cannot do alone nor can it happen overnight. But it seems that we are on this course now, but it will take beyond the end of the decade before we see real results.

I don't see what moving chip manufacturing out of Taiwan has to do with any of this though. Why should China care whether Apple has its chips made in Taiwan vs in the US? Heck, they would probably prefer the latter as it means less money going into Taiwan to support their military defense. If Apple did switch I wouldn't be shocked if some people tried to claim after the fact they did it due to pressure from China lol

 

[Doug S]

And that's what makes it a sweetheart deal.

Getting the same value for dollar is a "sweetheart deal"? Tell me you've never owned a business without telling me you've never owned a business...

It is all about who takes the risk for production problems. If I own a bar with a busted beer cooler so half the beers I pour are warm and flat but I serve them all regardless are you going to pay the same price for a beer at my place as the one down the street that doesn't have this problem? Maybe that other bar has a long line to get in so you still come to my place for now, but you will damn well remember how I treated you and the minute that line is gone or a third bar opens in town you are never coming back!

Apple may not have had the option of going to Samsung or Intel for A17, but if TSMC didn't eat the cost for their own failure that caused the low yields Apple might have said "OK fine we've got this backup plan version of A17 designed for N4P" and then TSMC's N3 lines are sitting idle and collecting zero revenue towards amortization. That scenario would be a much bigger problem for TSMC than it would for Apple. People are going to buy iPhone 15s even if A17 was a small step or hell even if they kept using A16 in it! They could hold off on M3 until next year when N3E was available (which who knows, maybe they do anyway)

 

[Doug S]

The math here doesn't work out in your favor here. If Apple is paying the same amount per working chip that they would if yields were >= 90%, but actually getting fewer chips, TSMC is losing money on that wafer (since about 1/2 off it is being thrown in the dumpster). Eh, what @moinmoin said.

You are ignoring amortization here. Getting half the revenue is better than getting zero revenue and having billions invested in the N3 lines sitting completely idle. Which they would be if Apple said "ehhh making us eat the cost of your failure on N3B is too expensive, we're going to a backup plan".

TSMC loses a LOT more money if the N3 lines are sitting idle than they do having Apple pay what they would have been paying if not for TSMC screwing up. Why should Apple have to pay the price for manufacturing problems that are not their fault?

 

[Doug S]

I wouldn't call that a sweetheart deal. But Apple could and likely will at some point fab their own chips. It's the Apple way. The big sticking point there is ASML though. Lots of fabs, both big and small. Same with material providers. But only one provider in the entire world capable of making the equipment. And they are backlogged for years. The way these machines work is insane. And there is probably ground Unicorn horns and chicken feet involved in there somewhere.

There is exactly zero chance of that happening. Apple may be the largest foundry customer out there, but they do not have the scale to operate their own fabs. Even Intel had to concede that owning your own fabs for your own exclusive use is no longer viable. The biggest problem is that Apple only needs the leading edge, and leading edge + 1 process. Their cost per chip would skyrocket if they can't grab that long tail of amortization from N+2, N+3, ... N+10 like TSMC does - and Intel plans to do going forward.

You don't understand the "Apple way" at all if you actually believe this is a possibility. Why isn't Apple hiring its own people to assemble iPhones instead of contracting it out to Foxconn if you falsely believe the "Apple way" is to bring everything in house?

 

[Thibsie]

All else being equal Apple would prefer buying from a US company and definitely would prefer buying from a company that doesn't have a policy of making all its leading edge chips (i.e. what Apple needs) in a country that could possibly be involved in a war or blockade at some point in the future. Or could have a major earthquake knock out production for months at ANY point in the future.

Can't happen overnight, but if Intel can deliver on their promises I would expect Apple to be their lead customer by the end of the decade.

It isn't as of the Apple Soc was the only part coming from that area.

 

[Ajay]

You are ignoring amortization here. Getting half the revenue is better than getting zero revenue and having billions invested in the N3 lines sitting completely idle. Which they would be if Apple said "ehhh making us eat the cost of your failure on N3B is too expensive, we're going to a backup plan".

TSMC loses a LOT more money if the N3 lines are sitting idle than they do having Apple pay what they would have been paying if not for TSMC screwing up. Why should Apple have to pay the price for manufacturing problems that are not their fault?

Fair point. Thanks.

 

[moinmoin]

Getting the same value for dollar is a "sweetheart deal"?

Yes, getting the same value for the same amount of a strongly depreciating currency is a good deal. E.g. if we take the US dollar and compare the pre-pandemic year 2019 with 2023, we get a cumulative inflation of 19.3% for these four years since (calculated by https://www.usinflationcalculator.com/). I don't know why people here like to pretend inflation is non-existing.

"Use inflation to push hidden price rises"

Please.

Please what?

In Germany where I live we got the news two weeks ago that according to the OECD here between end of 2019 and end of 2022 the actual wages went down by 3.2% (meaning inflation significantly outpaces increases of wages) while for companies costs for wages increased by 13% and profits increased by 24% in that time.

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[Doug S]

It isn't as of the Apple Soc was the only part coming from that area.

Of course not. Switching from TSMC to Intel is switching one very important high value product, but still only one. But it is one that would be impossible to replace if something (earthquake or war/blockade) affected TSMC's ability to operate.

There are other parts coming from Taiwan or TSMC in particular going in an iPhone, but they would be possible to replace from other sources. Apple might have to pay through the nose to do so as a hit on TSMC/Taiwan's production capacity would affect the entire consumer electronics universe, but Apple's margins and pricing power leave a lot more room for Apple to pay higher prices to source those scarce items from elsewhere than just about anyone else.

 

[Doug S]

Yes, getting the same value for the same amount of a strongly depreciating currency is a good deal. E.g. if we take the US dollar and compare the pre-pandemic year 2019 with 2023, we get a cumulative inflation of 19.3% for these four years since (calculated by https://www.usinflationcalculator.com/). I don't know why people here like to pretend inflation is non-existing.

I didn't mean to imply they would get the same value for dollar as if inflation didn't exist, just the same value for dollar as if TSMC's production issues with N3 didn't exist. i.e. that Apple would end up paying the same price per chip as if N3 had the same yields that every other TSMC process Apple has used for iPhone SoCs. N3 being more expensive means Apple would pay more per chip than they were paying for N5. As does inflation. Apple would not question those increases.

Paying even more on top of those two factors because TSMC hasn't reached mature production worthy yields with N3 yet is another matter entirely. Either TSMC charges per wafer and Apple eats the cost of TSMC's failure because they have to buy many more wafers than they otherwise would, or TSMC charges per KGD and they eat the cost of their own failure.

 

[DrMrLordX]

Of course, pitching yourself as offering good paying American jobs to get CHIPS ACT money makes this look pretty disingenuous.

It's starting to look like everyone dipping into CHIPs Act money is just ripping off the taxpayer in one way or another. TSMC won't pay their help while Intel is using public money to indirectly subsidize taking wafers from a foreign competitor (TSMC).

TSMC has complained about not being able to find enough well qualified workers with sufficient skills in semiconductor manufacturing - yet they'd like to open more FABs in China, where there is even less talent available (but it sure is cheap talent)

Opening fabs in China also exposes them to more espionage aimed at keeping SMIC viable.

 

[Ajay]

It's starting to look like everyone dipping into CHIPs Act money is just ripping off the taxpayer in one way or another. TSMC won't pay their help while Intel is using public money to indirectly subsidize taking wafers from a foreign competitor (TSMC).

The Biden administration put requirements for increased transparency so they can track were the money is spent. Intel said fine, TSMC is balking. It’s not perfect, but countries have subsidized critical industries for at least the past couple of centuries.

Opening fabs in China also exposes them to more espionage aimed at keeping SMIC viable.

True, though Chinese Intel efforts give them all the IP and techniques, etc. But not the experience.

 

[Exist50]

Guys, maybe move the politics discussion to another thread.

 

[Ajay]

Guys, maybe move the politics discussion to another thread.

I’ll stop - thanks.

 

[LightningZ71]

Does anyone have any idea is Apple is hedging their chip supply security by continuing R&D efforts for their leading edge processors with alternate suppliers? In other words, are they working with Intel or Samsung on a VERY limited basis to have a process compatible design ready for volume fabrication in case of a worst case scenario with TSMC? I realize that this would be VERY expensive, but Apple is quite heavy on spare cash flow.

 

[jpiniero]

I'd be surprised if anything other than M3 ships using N3B. Especially if TSMC hasn't shipped any N3B for revenue yet and N3E will start ramping at the end of the year.

 

[SpudLobby]

Yeah I suspect LNL and ARL will use N3E.


EDIT: Probably not? I hope LNL uses N3E given the power advantages with FinFlex where it'd probably be particularly useful, but overall not a huge deal I guess.

 

[Doug S]

Does anyone have any idea is Apple is hedging their chip supply security by continuing R&D efforts for their leading edge processors with alternate suppliers? In other words, are they working with Intel or Samsung on a VERY limited basis to have a process compatible design ready for volume fabrication in case of a worst case scenario with TSMC? I realize that this would be VERY expensive, but Apple is quite heavy on spare cash flow.

I'm not sure how useful that would be, as Samsung wouldn't have the kind of spare capacity just laying around to supply Apple in the event of something happening with TSMC. Even if they did, they would have a lot of competition for that supply - including from Samsung's own phone division.

So their biggest expense doing something like that probably wouldn't be the design port, it would be some sort of payment for a guaranteed option on a whole bunch of wafers.

 

[aigomorla]

DO NOT Bring Politics into Tech, unless its absolutely necessary, like a blocking of a sanction chip or something which relates to topic, and even then you better tread very lightly on the Politics and just get the point across. I do not want to do any house keeping with Politics Drama in Tech.

Moderator Aigo

 

[mikk]

Another customer for Intels 18A:

Today, Intel announced a strategic collaboration agreement with Ericsson to utilize Intel’s 18A process and manufacturing technology for Ericsson’s future next-generation optimized 5G infrastructure.

Intel, Ericsson Expand Collaboration to Advance Next-Gen Optimized 5G Infrastructure - Intel Newsroom

Intel to manufacture future custom 5G SoC for Ericsson on 18A process technology.

www.intel.com

 

[jpiniero]

Another customer for Intels 18A:

Intel, Ericsson Expand Collaboration to Advance Next-Gen Optimized 5G Infrastructure - Intel Newsroom

Intel to manufacture future custom 5G SoC for Ericsson on 18A process technology.

www.intel.com

Weren't they the ones that got screwed over by 10 nm? Guess they are back for more.

 

[igor_kavinski]

Weren't they the ones that got screwed over by 10 nm? Guess they are back for more.

Weren't those unsubstantiated rumors? https://news.ycombinator.com/item?id=17963091