While TSMC's 5nm & 3nm lead the revenue charts, it looks like the next-gen 2nm process node is looking at higher demands.
While 3nm & 5nm brought higher revenue, 2nm exceeds in demand as per TSMC
TSMC's quarterly revenue report is out and the company is now in a good position than ever. TSMC saw big profits in Q3 2024, surpassing last year's record, which as per the company's chairman will keep on going for the next five years. Additionally, we can see that its smaller process nodes are now being shipped the most to its customers, bringing in more revenue than bigger and older process nodes.
As reported by EDN and MoneyDJ (via TrendForce), TSMC confirms that the AI demand is real and the foundry is expected to grow significantly in the next five years. Currently, the 5nm process node from the company attracts the most revenue as per the Q3 2024 report, bringing almost 32% of all the revenue combined.
The next is 3nm, which secured 20% of total profit, followed by 7nm with 17% profit, and others. As per the graph, the Gross Margin for the company has increased by 57.8% in Q3 2024, which is about 3.5% higher than it saw in Q3 2023 and is the biggest in this year. As far as the revenue goes the company is 36% up Y-o-Y with 23.50B in Q3 2024, compared to 17.28B in Q3 2023.
Even though the pie chart right now shows the dominance for 5nm and 3nm process nodes, it's expected that the 2nm shipment will outperform both nodes when it starts shipping. Currently, the company is seeing higher interest from its customers for the 2nm node than 3nm. The mass production for the 2nm node is expected to start in 2025, which is going according to the schedule and till then the 3nm process node will be the key revenue driver till 2026.
TSMC's 2nm process fab units in Baoshan and Kaoshiung are expected to reach a yield of 30,000 and 35,000 wafers respectively but will exceed 100,000 wafers by 2027. Apple, NVIDIA, and AMD are expected to be the first customers for the 2nm node, and with their increasing desire to manufacture high-performance chips, the 2nm node is expected to be utilized more than the 3nm node.
However, the competition isn't going to be easy for TSMC as Samsung has already jumped in to start its own 2nm process node production and will further expand its operations by producing 1.4mm node. Next is the A16 process node, which will enter mass production in 2026 and is attracting customers already. It's going to be interesting to see the competition between these two foundries over the next few years as the one who gets the most orders from giants like NVIDIA and Apple will have an upper hand.
News Source: TrendForce
