The yield rate of A17 Bionic and M3 is only 55%, Apple only pays for qualified 3nm chips from TSMC

This year, Apple is set to introduce the A17 Bionic and M3 chips, where the former will be incorporated into the iPhone 15 Pro and iPhone 15 Pro Max, and the latter will be utilised in new MacBook models. Both chips will embrace the first 3nm process node, N3, by Taiwan Semiconductor Manufacturing Company (TSMC), with Apple securing 90% of the initial order volume for this process node.

According to EE Times, TSMC has encountered issues with the 3nm chip production, persistently failing to improve the yield rate. The yield rate for the A17 Bionic and M3 chips stands merely at 55%, indicating that nearly half of the chips are unusable, a considerable deviation from the normal yield rate. Consequently, both TSMC and Apple have agreed not to charge based on the standard wafer price; instead, Apple only compensates TSMC for the cost of the qualified chips.

By the end of 2023, TSMC’s monthly wafer production for 3nm chips is estimated at approximately 100,000. With a 55% yield rate, only 55,000 meet Apple’s standards for usable chips. It’s rumoured that both parties agreed on a price of $17,000 per wafer. If TSMC wishes to charge Apple based on the standard wafer price, the yield rate needs to be elevated to 70%, a feat unattainable before the first half of 2024, whereas the A17 Bionic is set to enter mass production in August.

Speculation suggests that Apple may switch to the N3E process in 2024, rather than the previously rumoured N3B process. This change promises a higher production volume and yield rate, alongside a lower production cost. However, the transition might result in a potential performance decline for the A17 Bionic and M3 chips, hence Apple appears to be yet undecided.