Apple concedes it is constrained by TSMC’s supply of advanced chips; storage and memory are also in short supply — firm isn’t projecting supply conditions beyon

'TSMC 'very nervous' about AI bubble concerns despite another record-setting quarter, but assured of demand

While the Nvidia Rubin ramp is a very significant event for the industry, as the company controls the lion's share of the data center AI market, it looks like there are more customers ramping up their silicon-intensive platforms on TSMC's N3, which is why the foundry has limited capabilities to respond to Apple's requests for extra capacity.

All of TSMC's widely used 3nm-class nodes — N3E and N3P — use up to 19 EUV lithography layers, which is down from 25~28 supported by the original N3B, according to reports. Reduced usage of EUV exposures allows TSMC to lower its reliance on EUV scanners, which can positively affect output for cases when the number of EUV lithography systems in a fab is limited. In fact, TSMC has been working for some time converting its N5 to N3-capable capacity, which to a large degree meant adding EUV tools where possible or maybe upgrading EUV systems where possible. This is a mid-term project, though.

"We are also pulling forward the existing fab schedules to the extent possible, both in Taiwan and in Arizona," said C.C. Wei, chief executive of TSMC, back in December. "We are also leveraging our manufacturing excellence to drive greater productivity in our fabs to generate more output, convert N5 capacity to support the N3 wherever necessary, and focus on capacity optimization across nodes, to maximize the support to our customers."

Also in the call, Apple's chief executive mentioned the company's concerns about memory and storage supply as well as prices going forward . Large OEMs tend to have long-term volume-related supply agreements for commodities, with additional negotiations concerning supply and prices happening early in the year. To that end, it was a surprise to see supply chain genius Tim Cook saying that Apple was in 'a supply chase mode to meet the very high levels of customer demand.' Yet, the supply chain of logic chips like those used in iPhones and memory used in the said devices is structurally different.

It just so happened that memory is a commodity. DRAM vendors can redirect capacity across customers, die densities, and even memory types (HBM, LPDDR, GDDR) with fewer process changes and shorter qualification cycles. Large OEMs like Apple must qualify the said memory devices, then they are good to go into production of iPhones or Macs. Apple is rumored to have qualified YMTC's 3D NAND memory for iPhones sold in China.

Foundry capacity at TSMC is structurally harder to secure than memory, as it is booked well in advance. Once you have it, it sticks across the variety of products and volumes. When demand surges, there is no fast substitution: you cannot shift N3 volume to N5 without redesigning the chip, nor can you split production across foundries without essentially redesigning the IP that keeps you competitive.

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Anton Shilov is a contributing writer at Tom\u2019s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends. ","collapsible":{"enabled":true,"maxHeight":250,"readMoreText":"Read more","readLessText":"Read less"}}), "https://slice.vanilla.futurecdn.net/13-4-13/js/authorBio.js"); } else { console.error('%c FTE ','background: #9306F9; color: #ffffff','no lazy slice hydration function available'); } Anton Shilov Social Links Navigation Contributing Writer Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

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• https://www.tomshardware.com/tech-industry/semiconductors/apple-concedes-it-is-constrained-by-tsmcs-supply-of-advanced-chips-storage-and-memory-are-also-in-short-supply-firm-isnt-projecting-supply-conditions-beyond-the-second-quarter#main
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