Many may criticize Trump for his sluggish approach to a variety of issues. However, his administration did a good job of focusing on domestic semiconductor production. As a result, the world’s leading foundry, TSMC, established a chip manufacturing facility in Phoenix, Arizona. It will begin production as early as 2024. Apple and TSMC are in talks to relocate 3nm chip production to the United States.
THIS YEAR, 3NM CHIPS WILL BE SHIPPED
Lower process nodes, for those who are unaware, drive more transistors on the SoC. As a result, more power and operations per second are generated. Previously, Samsung and TSMC were the only companies innovating in the field of manufacturing processes. However, the chip heats up due to Samsung’s 4nm process node. In effect, all 4nm process edge chip makers switched to TSMC. Samsung chose to skip this node in favor of 3nm. In effect, the Korean firm will soon release 3nm chips. TSMC, on the other hand, will begin production of the 3nm A17 Bionic for the iPhone 15 Pro and iPhone 15 Ultra next year.
Consider the previous Apple chips produced using various manufacturing processes. The Apple A13 Bionic processor powered the iPhone 11. TSMC’s 7nm process was used in the latter. In 2019, 8.5 billion transistors stunned all applications. Apple announced the iPhone 14 Pro with the A16 Bionic processor this year. It employs TSMC’s improved 5nm process (aka 4nm). A single chip contains approximately 16 billion transistors.
In this regard, consider IBM’s announcement in May 2021. The company then announced the development of a 2nm chip. This will enable chipmakers to “pack 50 billion transistors into a space the size of a fingernail.”
WHY DOES APPLE WANT TO RELOCATE CHIP PRODUCTION FROM CHINA?
For decades, Apple and TSMC have collaborated. The Cupertino-based company generates 25% of TSMC’s annual revenue. American firms are already shifting their investments from China to India, Vietnam, Thailand, and other South Asian countries. This, however, could not be accomplished with a snap of the fingers. Some analysts even predicted that Apple would need at least eight years to transition iPhone production from China to India.
China, on the other hand, wishes to become self-sufficient in chip production. China could “swallow” Taiwan whenever it wants. As a result, it makes sense for Apple to relocate chip production away from China and Taiwan.
The Phoenix manufacturing plant is waiting for the 5nm chips to be phased out of the market. Once completed, Apple and TSMC will most likely shift 3nm production to the United States. Of course, TSMC will need to bring in more top talent to the United States.
Even if Apple and TSMC start manufacturing chips in the US, many obstacles will remain. We mean that China has an advantage because of its supply chain. To put it another way, everything is made in China or neighboring countries. Logistics is flawless. As a result, if TSMC decides to manufacture 3nm chips in the US, they will be cut from the supply chain.
There’s another problem. The factory in Arizona may not open until 2025. However, we anticipate that Apple and other companies will have moved to 2nm chips by that time. Simple calculations show that this process node will be used by the iPhone 17 Pro series. However, if Apple continues to differentiate the chips used in non-Pro and Pro models, the iPhone 17 models may use US-made chips by 2025.