We recently reported on the high stakes bidding war unfolding behind the scenes around TSMC’s upcoming 3nm node. The 5nm process was/was an indisputable success and the 3nm process node is expected to lead the industry as well. The only question is what companies will have deep enough pockets to secure. We previously predicted it would be Intel and Apple. Now a report from Digitimes confirms that this is indeed happening. This in itself is just a confirmation of previous reports, but what is new is that it may leave AMD out in the cold.
The new reports from Digitimes via Wccftech, and states that AMD plans to use TSMC 3nm for its Zen 5 CPUs. As a refresher, the company is currently using a 5nm TSMC node in its Zen 4 architecture, which is supposed to debut later this year. After that, he was clearly hoping to jump to the newer node, but it’s clear that Apple and Intel have already secured the full capacity of the TSMC chip. Apple reportedly uses it for its M2 silicon, and Intel needs it for its Meteor Lake GPU tiles. TSMC is expected to begin production at 3nm later this year, with mass production beginning in 2023. However, if TSMC is only able to meet Intel and Apple orders over the next year, that will push AMD back. This may force the company to wait until 2024, or even 2025, to reach its most advanced node. Digitimes reports that Nvidia and Mediatek may also be affected by TSMC’s prioritization of Apple and Intel. As we wrote earlier, everyone wants a piece of that 3-nanometer node.
However, there is one point to note: a fast shift to 3nm will be unusual for AMD. It’s been years since GPUs or CPUs were launched; Mobile phone chips are always the first to appear. The rapid shift from 5 nm to 3 nm was unusual. Several generations of a 5nm product will be normal based on the Ryzen development timeline.
At first glance, this appears to be a huge problem for AMD. However, assuming Zen 4 launches in late 2022, that means Zen 5 could appear about two years later. That’s a similar cadence that the company followed from Zen 2 to Zen 3, so the disruption may not be that big after all. Also AMD doesn’t have to worry about Intel getting 3nm CPUs from TSMC, as Intel will make the majority of its CPUs in its own Fabs. Intel has also argued that node supremacy will be near a relic of the past as encapsulation technology plays a more prominent role in the architecture’s performance profile.
It’s also possible that AMD will stick with 5nm with the Zen 5 as well. After all, I used TSMC’s 7nm node for both Zen 2 and 3. However, it wasn’t encountering a revitalized Intel in those days. By 2025, Intel has announced that it will indeed be moving beyond FinFET into next-generation technology. This includes a new comprehensive RibbonFET transistor and PowerVIA bonding technology. These are expected to appear in the tiled Arrow Lake architecture. Intel isn’t blowing smoke this time either, having already announced that it’s ahead of the schedule with advanced node development. This could put AMD in trouble by 2025.
As for why TSMC prioritizes Intel and Apple, let’s take a look at the number the companies published recently. Apple announced that revenues for the first quarter of 2022 were a staggering $97.3 billion, of which $25 billion was profit. Intel reported revenue of $18.4 billion for the first quarter (a seven percent decrease year-over-year). AMD will announce its first-quarter earnings on May 3rd, but it’s expected to be around $5 billion. Intel and Apple obviously have larger bank accounts. Also, both companies seem willing to open their checkbooks, regardless of the cost. One last interesting note is that we previously reported Intel’s desire for 3nm TSMC capability without upsetting Apple. Intel even sent its representatives to Taiwan to handle the deal directly. Apparently, the company succeeded, although we’re still treating all of this as speculation until we hear it straight from TSMC.