An important is brewing crisis in the chip production market in Asia and there is only one device and technology manufacturer that has the bull by the horns. If the forecasts of the Asian specialized media go as indicated, in 2024 a large part of the brands could find themselves facing serious problems.
There are two manufacturers that embarked on the adventure of manufacturing 3nm chips with an integration system that predicted very good results and would help make an important technological leap. It was Samsung and TSMC, who started out being very clear that It wasn’t going to be a bed of roses. With the pressure of the market and the numbers against them, they knew that they would have to suffer until they could achieve both profitability and a production flow that would allow them to begin to see positive results. However, things don’t seem to be going well.
Production has not yet taken off
These two companies began the production of integrated circuits in 2022 and the forecast was that by 2023, at least on dates like these, close to the end of the year, a yield per wafer of 70% would have been achieved. That would be the ideal situation. In any case, months ago, already in 2023, the Asian media made it clear that progress was not as expected. The two companies had encountered serious difficulties and could not overcome a performance that was far from 60%.
And what it means to not be able to achieve the productivity they need in the production of 3 nm chips is that they do not have the capacity to meet the demand that is made by their customers. If we take into account that this is increasingly higher due to the use of this integrated technology, it is obvious that for TSMC and Samsung it is a big problem. But the worrying thing is that TSMC has an additional headache: that one of your clients places himself above the others.
Apple leaves nothing to chance
The pressure that TSMC feels from its supplier-customer relationship with Apple is too intense to let it pass or not give it as much importance. The data shows that, in the year 2022, more than 20% of income of the Taiwanese company came from Apple’s coffers. That makes them not only your best customer, but a company that has such importance in the future development of your business that they can push you to take concrete measures that benefit you and ensure the flow of 3nm chips that you need to power your iPhone.
And the best way to verify the control that Apple has over TSMC and that strength over its performance is that, in the midst of this crisis, the apple firm managed to get the Taiwanese brand be held responsible for defective units of 3nm chip wafers. That, in an industrial environment, is not exactly common. What usually happens is that the client is the one who bears this expense and not the other way around. However, the strength that Apple has over TSMC led to the acceptance of the conditions, conditions that, in the long run, have only further slowed them down in their search for stability.
Aside from this, what has already become clear in the Asian press is that TSMC’s production on 3nm wafers is going to focus on one main objective: supply Apple with all the chips it needs for the iPhone. What they can do in 2024 outside of this will be dedicated to other clients, but today, the apple company will be the first to receive their orders. And it does not seem that they are going to cover a percentage of their orders while giving attention to their other clients, but until they cover all their demand they will not continue working with the rest. In practice, Apple could end up having an important force on the market, especially given that it knows the supply problems that its rivals would face.
Some of the companies that are also waiting for these chips from TSMC include names like Qualcomm, Nvidia, MediaTek or AMDIn short, big fish that have enormous importance in terms of the components that mobile phones and other devices of all types of brands have. Therefore, it cannot be said that we are not going to start the year with some tension in the market, especially because analysts do not believe that TSMC will be able to cover the production of 3 nm wafers that it would need to avoid entering into a crisis. We will have to see, in parallel, what happens with Samsung.
