TSMC's chip capacity has become a real bottleneck for companies in the AI race, and a new report indicates that the 3nm node is in high demand across major segments of the industry.
Apple & NVIDIA Are Major 3nm Clients, and the Supply Shortage Actually Helps Them Offset Competition
We have discussed TSMC's chipmaking capabilities being under pressure, as every major entity in the AI race depends on the Taiwan giant. From GPU and CPU manufacturers to hyperscalers and other consumer segments, almost everyone is currently looking to place orders with TSMC, yet the chip giant's capacity simply isn't enough. According to a DigiTimes report, TSMC's 3nm supply is highly constrained, making it difficult for businesses to proceed with their product plans without making aggressive changes. Among all customer categories, it is said that only long-term, "loyal" customers receive their products.
This is not only due to continuously rising prices caused by supply shortages, but also because insufficient capacity makes it difficult to win business. All of this has made procurement and capacity allocation the biggest operational challenges at present.
- DigiTimes
Manufacturers like Apple and NVIDIA are likely among the biggest beneficiaries of the supply shortage at TSMC, given that not only do they have exclusive access to production lines, but, as dominant customers, they leave little room for competitors to place orders. NVIDIA's close relations with TSMC make them exclusive clients for processes like the A16 as well, which means that, in the long term, "loyal" customers are benefiting from the shortages, helping them edge out competition in the AI space.
At the same time, demand for high-end nodes from TSMC is also driven by companies with consumer products, such as Intel and AMD, but the allocation they receive is far lower than that received by the AI sector. Similarly, ASIC manufacturers have also taken up a large share of the semiconductor supply chain, yet their access to TSMC's 3nm supply is also constrained, which, again, creates problems for ramping up manufacturing volume. Since relying solely on TSMC won't work for firms seeking capacity, DigiTimes accepts that the only alternative left is to reach out to other foundries.
In terms of external volume, after TSMC, Samsung Foundry has seen significant attention in recent times, driven by clients like Tesla and Apple, as well as potential ones like AMD. Apart from Samsung, Intel Foundry is also being explored by various fabless manufacturers, yet for now, there are few signs that attention is translating into volume. The major question right now is whether firms are ready to diversify their foundry partners, since it not only entails the cost of switching microarchitectures but also risks losing relations with TSMC.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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