The Race for 7nm Chips

TSMC is planning on 7nm chips followed by 5nm chips followed by 3...it just keeps going

If it hasn’t been clear already by the production of monsters like AMD’s Threadripper line of processors, we are in an arms race where processing speeds will only get faster at what seems like an accelerating rate.

And that point has been made even clearer by the recent annoncement from the semiconductor manufacturer, TSMC, that they’re putting down more than 21 billion dollars into building Fab 18, the lab for the manufacturing of 5nm chips, and expect mass production of these to be in service by late 2019. That seems like an ambitious statement, considering that last week they just announced that they’re boosting production of 7nm chips to commercial outputs.

TSMC has a few buyers lined up already, including AMD, Apple, Bitmain, NVIDIA, and Qualcomm. The deliveries for those orders will be filled in the first half of 2019, according to TSMC, at the same time that they’re going to be starting risk production on the 5nm chips. But the Marvel Universe schedule doesn’t stop there, because when they’re in full production of 5nm chips in 2020 Fab 18 is going to be starting right in on 3nm chips.

Right now, these 7nm chips are being designed for AI, GPU, cryptocurrency, and 5G applications. But guess who’s going to be playing a major part in ramping up the production of these new 7nm chips? None other than Apple, who after using dual suppliers for their A line chips (TSMC and Samsung), for years, realized that TSMC makes the better chips, and has and still will stick with them as their only supplier for the iPhone line. The A12 processors carrying these chips are going to be big in increasing the speed the 2018 iPhones, and getting fresh, smaller, better chips in the years to come will only be in their favor. But it’s not just Apple who’s denounced Samsung in their chip production, Qualcomm also abandoned them in favor of TSMC since they weren’t able to develop the chips faster than TSMC. It’s looking like they’re falling behind in the smartphone game.

Samsung has been trying for a while to break into the logic chip market with relatively little to show for it. Currently, they hold about 7.7% of the market while TSMC holds strong with 56%. With most of their revenue coming from the memory market, they want to get into the business that seems to be blooming with research into AI and machine learning. By 2022 they’re hoping to boost that number to 25%, but they’re still going at a lower budget that TSMC with thier capital expediture standing at $5 billion with TSMC at $11 billion.

It’s a long road ahead.

Tim Kallman

Tim is currently pursuing a career in video game design and development and is combining that with his passion for writing to make his thoughts heard. The industry is growing ever upwards and he wants to be a part of it any way he can. His love for video games extends to the custom PC he's built and maintained over the years with only the best parts he can find
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