TSMC (2330) this year has been strongly supported by the order momentum of artificial intelligence (AI) and high-efficiency computing (HPC) from its six major customers, including Apple, Nvidia, Intel, MediaTek, Qualcomm and Broadcom, and its production capacity will be full until the end of the year. The industry pointed out that in response to strong demand from customer orders, TSMC's 3-nanometer process expansion is expected to be gradually put in place. It is expected that TSMC's 3-nanometer process capacity will nearly double this year, and the capacity utilization rate is expected to be strong until the end of the year.
The demand for AI and HPC is currently rising rapidly, among which NVIDIA's HPC chip production is the strongest. Among them, the new product B100 will use TSMC's 3nm process. Other major customers such as Apple, Intel, MediaTek and Qualcomm will build computing chips for smartphones and PCs in response to the high computing power needs of AI. They will gradually increase their investment in TSMC's 3nm process in the first and second half of the year, becoming the key to strong demand for TSMC's 3nm family this year.
In order to respond to customer demand, TSMC has decided to significantly expand its 3nm process capacity this year. Industry estimates indicate that TSMC's 3-nanometer process production capacity is expected to reach a monthly production capacity of 100,000 pieces by the end of this year, nearly doubling the 60,000 pieces in 2023. The main expansion plant will be located in the Fab18 factory in Nanke.
It is understood that TSMC’s 3-nanometer family is the advanced process node with the strongest demand after 5-nanometer. It is currently in mass production and includes N3 and N3E. In the future, it will gradually introduce N3P, N3X and N3AE processes that are targeted at the automotive electronics market, becoming the main driving force for TSMC’s revenue growth this year.
The legal person pointed out that after TSMC started mass production of the 3-nanometer process last year, as the yield rate gradually increased, this year's yield rate will be at least 80% or above. And as the six major customers have begun to mass-produce TSMC's 3-nanometer process this year, it is expected that TSMC's capacity utilization rate in the 3-nanometer process will rise to more than 80%, so that the production capacity is expected to be strong until the end of the year.
According to information released by TSMC in a recent earnings call, 3-nanometer process revenue has accounted for 6% of overall revenue after entering mass production in the second half of last year. It is expected to reach 14-16% this year, which means that related revenue will jump three times. President Wei Zhejia even pointed out at the press conference that almost all smartphone, AI, HPC and other related customers around the world are cooperating with TSMC's 3nm process, which shows that TSMC has the most leading technology in the industry.