TSMC is on track to move 5nm process technology to volume production in second-quarter 2020 as scheduled, and continues to see the process capacity fully booked despite recent speculation claiming that the foundry has been requested by Apple to defer production of its next-generation A-series chips, according to industry sources.
With the coronavirus spreading rapidly around the world, Apple, according to the speculation, has asked TSMC to postpone production by one to two quarters for 5nm A-series chips that will power the upcoming flagship 5G iPhones. Whether the new iPhones will be unveiled in September this year remains to be seen.
But sources familiar with the matter believe that even if Apple defers production or scales down its overall 5nm chip demand this year, TSMC will still see its 5nm process capacity fully booked by orders placed Huawei's HiSilicon and AMD. HiSilicon still has no plans to cut its 5nm chip orders placed with TSMC despite unfavorable trade conditions facing its parent company, while AMD has placed additional 5nm chip orders with TSMC for its aggressive CPU-GPU product roadmap, the sources said.
Besides, Nvidia is vying for 5nm process manufacturing support from TSMC, the sources noted. Orders from Nvidia could immediately fill up TSMC's 5nm process capacity if demand from Apple disappoints, the sources continued.
Speculation has also circulated in the market that the coronavirus pandemic is disrupting the installation of TSMC's advanced 3nm process manufacturing equipment, which may not take place until October.
But ASML has already fulfilled EUV equipment orders for 2020 placed by TSMC enabling the foundry to complete about half of its 3nm process equipment move-ins, according to the sources. TSMC is poised to move 3nm process technology to risk production in the fourth quarter of 2020, and will be able to carry out its plan to enter volume production of 3nm chips during the first half of 2022, the sources believe.
Qualcomm will join TSMC's other major clients demanding the foundry's more advanced 3nm process manufacturing, which include HiSilicon, Apple, AMD and Nvidia, the sources said.
Meanwhile, some market observers expect TSMC to see its second-quarter revenues affected negatively by a slowdown in orders for handset chips. The foundry is also likely to revise downward its revenues outlook this year due to the impact of the coronavirus pandemic, according to the observers.
TSMC is scheduled to hold its quarterly investors meeting on April 16, when the foundry is expected to provide more details about its advanced 5nm and 3nm processes and also its business outlook this year.
Article translated by Jessie Shen
