On Friday, Apple (NASDAQ:AAPL) confirmed its commitment to Taiwan Semiconductor Manufacturing Company's (TSMC) second-generation 3nm chip fabrication process, N3E, for its iPhone 16 lineup next year. This move marks a significant leap from the first-generation N3B technology used in the A17 Pro chip for the current iPhone 15 Pro models.
The adoption of the N3E process is expected to enhance chip performance and power consumption across the new iPhone range. The process will be adopted by all major chip vendors, with the exception of Samsung (KS:005930), starting from 2024.
With Intel (NASDAQ:INTC) experiencing delays in its CPU platform design plans, Apple is projected to utilize all of TSMC's 3nm production capacity at its Taiwanese pure-play foundry. This move could contribute up to $3.4 billion in sales or constitute 4-6% of TSMC's overall sales in 2023.
In addition to Apple's commitment, TSMC has plans to advance N3P to volume production by late 2024. This offers a 1.04x increase in chip density, a speed increase of 5%, and a reduction in power usage between 5-10% over the N3E process.
The iPhone 16 Pro models are expected to feature a faster 5G modem, Wi-Fi 7, and a new 48MP sensor for the ultrawide lens. Major chipmakers such as Qualcomm (NASDAQ:QCOM), MediaTek, and AMD are also anticipated to commission N3E circuitry from TSMC for their advanced chips.
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