TSMC, Intel, Samsung Foundry ready to battle over the start of 2nm production next year
There is a huge battle shaping up in the world of semiconductors as cutting-edge foundries start mass-producing chips using the 2nm process node next year. This coincides with the third year of 3nm production. The first smartphones powered by a 3nm chip were the iPhone 15 Pro and iPhone 15 Pro Max both of which were equipped with the A17 Pro application processor (AP) built on TSMC's OG 3nm node (N3B).
TSMC's third-generation 3nm node will be used to build Apple's A19 series application processors for next year
TSMC's second-gen 3nm node (N3E) is used to manufacture the A18 and A18 Pro APs used to power the iPhone 16 series. Despite earlier rumors about TSMC building the A19 series APs using its 2nm node, the chips for next year's iPhone 17 line will be manufactured by TSMC using its third-generation 3nm process node (N3P). Apple might have been looking to save some money by waiting until 2026's iPhone 18 series to use the 2nm node for its A20 and A20 Pro APs. The price of silicon wafers used to manufacture chips using a new process node is usually higher during that node's first-year of use.
The iPhone 15 Pro and iPhone 15 Pro Max (pictured) were the first phones powered by a 3nm chipset. | Image credit-Apple
The world's largest contract foundry, TSMC, is already filling up its "dance card" at 2nm. Besides having Apple, its largest customer, all signed up for 2nm production in 2026, TSMC clients such as HPC (High-Performance Computing) manufacturers, AI, chipmakers, and mobile chipmakers are all in. This has given the Taiwan-based foundry a lead over Intel and Samsung Foundry when it comes to 2nm orders. Besides Apple, other notable firms that have indicated a desire to hop aboard TSMC's 2nm train include AMD, Nvidia, MediaTek, and Qualcomm.
Samsung Foundry has been having issues over the last few years with its yield at 4nm, 3nm, and 2nm. The yield measures the percentage of chips produced from a silicon wafer that passes quality control and can be used to power a device. Samsung Foundry's 4nm yield was so bad when producing the Snapdragon 8 Gen 1 for Qualcomm that the U.S.-based fabless chip designer dropped it for TSMC. The latter built the replacement Snapdragon 8+ Gen 1 AP. Eventually, Samsung Foundry did improve its yield to 70% at 4nm.
However, the foundry continues to have yield problems at 3nm that have reportedly led to a delay in the production of the 3nm Exynos 2500 AP. As a result, Samsung might have to shell out the additional cash needed to equip all Galaxy S25 series phones with the more expensive Snapdragon 8 Elite SoC instead of its in-house Exynos 2500. Low yields add to the cost of a chip since additional silicon wafers are needed to build enough chips to fulfill an order.
Another entry in the 2nm competition is Japan's Rapidus. The company is being funded by the Japanese government which itself is collaborating with the U.S. to make 2nm chips using IBM technology. As an answer to a future trivia question, Big Blue (IBM) made the first chip using a 2nm node back in May 2021 and even used the Gate-All-Around (GAA) transistors that surround the channel (where the current flows through) on all four sides using vertically placed horizontal nanosheets,
GAA allows for greater control over the drive current, and reduces current leaks. This leads to the production of more powerful and energy efficient chips.
Intel still is in the game but is engulfed in chaos
Returning to Japan's Rapidus, the company plans to focus on small orders and custom chips. It won't start out focused on achieving profitability with larger orders of mass-produced chips. Meanwhile, Intel's contract foundry business was a major part of the U.S. chipmaker's attempt to turn itself around. But that was ex-CEO Pat Gelsinger's plan and in 2021 he said that Intel would take process leadership from TSMC and Samsung Foundry by 2025 with its 18A (1.8nm) node.
But Gelsinger resigned on December 1st and while the company still expects to produce 1.8nm chips next year, chaos still reigns at Intel as no permanent replacement for Gelsinger has been named. So far, AWS (Amazon Web Service) is the only high-profile name to sign up for Intel's A18 process node.
Considering the pedigree of its client list, if one had to pick which foundry will win the 2nm battle, TSMC would be my selection.
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