Chip supplier TSMC's Apple business is expected to grow nearly 25 percent this year as the transition to Apple chips nears completion and the two companies grow closer, according to DigiTimes.
Apple is expected to ship chips to TSMC for the new iPhones and other devices in the first half of June, according to sources at DigiTimes. In addition to the year-over-year increase in iPhone chips in 2022, TSMC is also expected to "substantially" increase shipments of its M-series chips without using Intel CPUs in its own Mac lineup as Apple completes the transition to its own custom silicon chips. "
The report added that TSMC is expected to remain Apple's sole chip supplier for the foreseeable future, Samsung is having issues with advanced process yields, and Intel is unlikely to receive orders from Apple.
Overall, TSMC is expected to generate $17 billion in revenue from fulfilling Apple orders in 2022, up from $13.8 billion in 2021. While Apple's semiconductor manufacturing supply chain is "little affected by the ongoing lockdown in China," other parts of Apple's supply chain could be severely affected depending on how long the lockdown lasts, which the report speculates could lead to Apple being forced to delay this year Introducing new iPhone models.
In addition, Apple is said to have ordered 2nm chips, which will be completed by TSMC in 2025. The report also said that Apple and TSMC are jointly developing 1nm chips for augmented reality headsets and Apple's car projects.
TSMC's largest customer revenue ratio exposed
According to TSMC's financial report, last year's largest customer contributed revenue of 405.402 billion yuan, an annual increase of 20%, accounting for 26% of the company's revenue. The industry estimates that this customer should be Apple. The rise and fall of TSMC has been linked to Apple. Apple announced new spring products on the 9th. Many products use TSMC to manufacture chips, driving TSMC's stock price to rebound.
According to TSMC's financial report data, last year's total revenue climbed to 1.587 trillion yuan, an annual increase of 18.53%, setting a new record. Looking at the customer level, it is found that the largest customer contributed 405.402 billion yuan in revenue last year, an increase of 68.627 billion yuan or about 20.37% over 2020, and the proportion of total revenue rose from 25% in 2020 to 26%. The legal person estimates that it should be Apple.
The second largest customer contributed 153.74 billion yuan in revenue, accounting for 10% of the total revenue for the first time. The legal person estimates that it may be AMD.
The third largest customer is particularly interesting, contributing 167.39 billion yuan in revenue in 2020, accounting for 12% of total revenue, and falling below 10% in 2021. You can guess about this company.
TSMC's revenue in the Chinese mainland market continued to decline, with revenue falling to 164.552 billion yuan, a year-on-year decrease of 29.6%, ranking TSMC's third largest market, accounting for 10.3% of total revenue.
TSMC's largest market is still the United States, and its revenue exceeded 1 trillion yuan for the first time, reaching 1.01 trillion yuan, an annual increase of about 24%, accounting for 64%. The Taiwan market ranked second, with revenue of 203.963 billion yuan, an annual increase of 58%, accounting for about 12.8%.
As for the development of process technology, TSMC's 7-nanometer revenue continued to increase last year, rising to 440.383 billion yuan, an annual increase of 11.5%, which is TSMC's main process technology; 5-nanometer revenue reached 262.327 billion yuan, an annual increase of 1.88 times, ranking second in TSMC. The main process is the biggest driving force for TSMC's operational growth.
It is worth mentioning that the prospects of TSMC are inseparable from the U.S. market, especially Apple. Apple released its latest spring products on the 9th, including: A15 bionic chip with 5G iPhone SE 3, M1 chip for iPad Air 5 and Mac Studio, a desktop computer. The world's most powerful personal computer chip, the M1 Ultra, and even the Studio Display monitors are equipped with A13 bionic chips, which are manufactured by TSMC.
Apple will help TSMC lead the next era
On the morning of March 16, Beijing time, it was reported that Apple launched its latest computer, the Mac Studio, last week, and the star at the conference was the processor chip at the core.
The chip, called the M1 Ultra, isn't new. It's stitched together by two of Apple's previously-launched M1 Max chips for even more performance. The M1 Max has been used in high-end MacBook Pro notebooks. The biggest technological advancement of the M1 Ultra is the chip splicing technology. And for the resurgent chip giant Intel, the innovation could be bad news.
Apple has given this chip-splicing technology the snazzy internal name UltraFusion, but analysts believe it relies heavily on the underlying chip-making process from TSMC. TSMC is Apple's longtime manufacturing partner, helping Apple produce the chips that are at the heart of iPhones, iPads and Mac computers.
Analysts believe that Apple is the first customer of TSMC's new manufacturing technology. This may help TSMC increase production capacity based on this technology, and further optimize the process, eventually using the new process to serve other customers such as AMD and Nvidia. Neither company has announced plans to use the technology. On the other hand, Intel is also betting its revival plan on advanced chip-making technology.
Apple's UltraFusion is one of the advanced packaging technologies. Companies such as TSMC and Intel use this technology to package multiple chips or chip modules into a single finished semiconductor. This technology has become the key to rapidly manufacturing chips while reducing manufacturing costs. Currently, the technology is used in chips for data center servers and high-end desktops, where it improves the economics of larger chips.
The Apple M1 Ultra isn't TSMC's first foray into advanced packaging, but this could become a more important technology subcategory in the future. For TSMC, getting it right in Apple's chip offerings will help push other device makers to familiarize themselves with the technology, since Apple is TSMC's flagship customer and ships a lot of products.
Jan Vardaman, president of TechSearch International, said: "People don't like to be the first to eat crabs, but they like to see technology that other people are using. So once people see someone using new technology, New technologies will generate greater interest.”
TSMC declined to comment on specific chips and customers, but said packaging technology is "critical to product performance, functionality and cost."
Intel's lead has been surpassed by the likes of TSMC in producing the world's fastest processors. So Intel last year unveiled its revival technology, opening its own factories to make chips for outside customers. Intel calls this business "Intel Chip Manufacturing Services." Right now, however, Intel doesn't have the technology to make chips with the same speed and power efficiency as TSMC. Intel declined to comment for this article.
However, analysts believe that Intel's advanced packaging technology is competitive with TSMC. For example, Intel has used its chip splicing technology to attract customers such as Amazon Web Services. AWS said it will use Intel's services to produce custom chips for servers in AWS's data centers.
Strategy Analytics analyst Sravan Kundojjala pointed out that as one of Intel's flagship technologies, EMIB (Embedded Multi-Core Interconnect Bridge) uses bridging technology to connect chip components. Analysts believe that the TSMC technology Apple is using, the integrated fan-out local silicon interconnect, also uses a bridge to connect the two chips. These two new technologies have a cost advantage over using large silicon wafers to integrate all chip components together.
To be sure, Intel and TSMC's bridging technology differs a lot, and each has made many trade-offs. TSMC's technology supports more connections between chips than Intel's technology, which is important for transferring large amounts of data quickly. But Intel's approach is simpler in production.
"Intel wanted to design a product that could meet a lot of demand without supply chain issues," said Real World Technologies analyst David Kanter, noting that Intel is already working on its Sapphire Rapids server. This technology is used on chips, which may be shipped in tens of millions.
Wadman noted that there is no firm data yet on how the cost of TSMC's new technology compares to Intel's. The technical details of different advanced packaging technologies vary, she said. This is largely due to the fact that chip designers typically consider technologies that fit their goals, and that TSMC and Intel are not competing head-to-head.
Apple may also have added its own special technology to TSMC's advanced packaging technology that would never be available to other TSMC customers. But analysts believe that, for now, Apple is playing a key role in helping bring new technologies to market. Apple has also learned valuable lessons about how to splicing chips and chip modules into larger, finished semiconductors that could help the company save costs in the future.
Ben Bajarin, head of consumer technology at Creative Strategies, said: "In the future, even for basic chip modules, not relying solely on cutting-edge chip manufacturing processes will become a more economically positive way to design and architect chips. Way."
