TSMC has started volume manufacturing of high-performance 7nm parts according to a report by DigiTimes. The manufacturing concern has been on a roll lately and is expected to beat Intel foundry for the first time in many years when its high-performance 7nm parts hit the market in 2H 2019 through AMD (Intel's equivalent 10nm parts are expected to arrive later by the end of 2019). They have even started risk production of 5nm parts and expect volume production by 2020. Their dirty little secret? EUV.
TSMC ramps 7nm to volume using EUV, 5nm expected by 2020
It appears that TSMC did not make the same mistake Intel did and shifted to EUV directly from UV. Heres what this means. Wafers are etched using light and the minimum possible etch is the wavelength divided by 2. UV started with a wavelength of 400nm and the minimum possible etch using standard patterning was 200nm. You can get around this with a trick called multi-patterning and double/triple patterning, which allowed us to get down to incredibly small etches. This is something that has delayed the transition to EUV (Extreme Ultra Violet) for quite a few years. EUV has a wavelength of 13.5nm and the minimum possible etch using standard patterning is just under 7nm.
Intel had been the world's leading foundry since the turn of the century, but it stumbled on the 10nm node - a process it was supposed to deliver last year. The reason? it wanted to delay the transition to EUV and started using quad patterning. Unfortunately, there is only so far you can push a blunt instrument and because of this, it essentially lost its comfortable 1.5 year lead over the rest of the industry. TSMC, it appears, has jumped straight to EUV and has already begun volume manufacturing of the 7nm process. This is great (and very material) news for investors of the company.
With handset chip clients stepping up their pace of advanced chip orders, TSMC is expected to see its 7nm manufacturing processes run at full utilization in the third quarter of 2019, the sources indicated.
Qualcomm and MediaTek are both keeping a close eye on TSMC's 7nm process utilization rate, and are expected to follow suit demanding more wafer starts at TSMC later in the second quarter, the sources said. And with orders for the new-generation iPhone set to occupy the majority of TSMC's available 7nm process capacity in the third quarter, the pure-play foundry will enjoy a substantial rise in the process capacity utilization during the quarter, the sources continued. - DigiTimes
In fact, TSMC expects almost all of its 7nm capacity to be fully utilized by the third quarter of 2019. The company is expecting to report its first annual profit drop in over 8 years. Interestingly, however, and as always, Apple will take the biggest bite out of its 7nm capacity with Qualcomm and AMD following behind. This does mean, however, that AMD's 7nm parts will be facing supply issues during 2H 2019 and only when more capacity is added or freed up will the company be able to fulfil all the demand that it is inevitably going to face.