TSMC Expands 7NM Chip Production

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More 7nm factories as part of TSMC’s aim to compete with Samsung?

If we look at TSMC’s roadmap it is clear that the next thing we are going to see in PC will be the use of its 5 nm node, while in smartphones and derivatives there is already talk of the 3 nm node. That is why at first glance it may come as a surprise that TSMC is building new factories that will make use of its 7 nm node. What is the motive behind this decision?

There is little doubt that the future of CPUs lies in decoupling functionality into various chiplets rather than in monolithic designs. The caveat is that not all of these chiplets demand the most powerful nodes to operate, which increases demand for less advanced nodes. Future AMD Raphael CPUs based on Zen 4 are expected to use a 5nm CCD and a 7nm IOD.

TSMC has opted to develop new factories to accommodate the high demand for one of the foundry’s most successful nodes in the middle of increased demand for the already overstretched 7 nm node.

TSMC is building more factories for its 7nm node

According to industry sources, TSMC is proposing to create a new manufacturing center in the Taiwanese city of Kaohsiung, where they will build up to six plants to provide chips to clients using the company’s 7 nm node.

All of this correlates with TSMC’s pricing rise per chip, which has resulted in higher expenses for consumers. 10%–15% for 7 nm nodes or more advanced nodes, and up to 20% for more mature ones and thus older nodes that continue to use nodes for manufacturing older chips.

Because of the enormous amounts of products created at this transistor size, TSMC’s 7 nm node is currently fully saturated. Because the node will continue to be used for certain aspects of future chiplet-based CPUs and GPUs, it has been decided to shift a portion of future designs to the company’s 6nm node by 2022. 

What is certain is that the Taiwan foundry’s 7nm node will remain in high demand even after the launch of its 5nm node for high-performance processors.

All of this is a response to Intel and Samsung’s plans

Since Intel declared its plans to compete in the same category as the Taiwanese manufacturer, TSMC has been forced to rethink its strategy of divesting its factories to make third-party chips. 

As we reported a few days ago, the Asian foundry has had to adjust its plans for the 5nm node in the United States, where it will now manufacture in Taiwan and assemble in the United States.

The motive behind this strategy? Cost reduction for potential customers. Let’s not forget that while Intel has a vertically integrated business where they design and manufacture their chips, at TSMC they don’t design anything and depend on collaboration with third parties. Hence the dependence to get the best CPU and GPU designs for both PCs and other devices, in order to have their factories running at full capacity.

Nor can we forget its great rival in the Asian market, Samsung, which has long been the third in discord as far as large foundries for chip manufacturing is concerned. We must not forget that while TSMC is the leader in the manufacture of logic and therefore processors, Samsung is the leader in the manufacture of memories of all kinds. 

In any case, any false move by Samsung means potential customers for both TSMC and Intel.

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