TSMC’s 3/5nm production capacity is approaching full capacity ahead of schedule
Last month, TSMC disclosed its financial results for the fourth quarter of 2023, showcasing a significant surge in the production volume of the 3nm process node. The revenue share of this advanced manufacturing process escalated from 6% in the previous quarter to 15%. This remarkable performance steadied TSMC’s financial outcomes amidst challenging conditions, thereby injecting a robust dose of optimism into its projections for 2024. The company has not only raised its revenue expectations for the upcoming quarters but also anticipates an annual revenue growth exceeding 20%.
According to DigiTimes, TSMC’s 4/5nm process technologies were operating at nearly 90% capacity utilization by the end of 2023, reaching full capacity in the first quarter of 2024. This achievement is pivotal in stabilizing the company’s financial health, especially given that these process nodes are the primary choice for orders from High-Performance Computing (HPC) clients, including those manufacturing smart devices and artificial intelligence (AI) chips. Moreover, the demand for TSMC’s 3nm process exceeded expectations, with capacity utilization rising from 75% at the end of 2023 to 95% currently. In early 2024, monthly production capacity hit 100,000 12-inch wafers.
Throughout the past year, the capacity utilization rate for the 6/7nm processes, which had once dipped below 50%, gradually recovered to over 75%. The much-favored 28nm process saw its capacity utilization return to a healthy level of over 80%. In the first quarter of 2024, TSMC reported that its overall 12-inch wafer capacity utilization stood above 80%, a noticeable improvement from 70% in the fourth quarter of 2023. Even the 8-inch wafer capacity, which experienced a downturn in 2023, rebounded to 75% in the first quarter of 2024.
TSMC is making smooth progress with its 2nm process technology. The Baoshan P1 plant is scheduled to start pilot production in the fourth quarter of 2024, with mass production commencing in the second quarter of 2025. Similar to the 3nm process, Apple is slated to be the first customer for this cutting-edge technology. Rumors suggest that TSMC has prepared a VVIP channel for Apple, while many other prestigious clients, including Intel, Qualcomm, NVIDIA, AMD, and MediaTek, are expected to gradually initiate collaborations.
