AI Chips Move to 3nm, TSMC's Revenue Set to Soar

As leading chip manufacturers, including Apple, Qualcomm, MediaTek, NVIDIA, AMD, and Intel, intensively adopt TSMC's latest N3E and N3P process technologies in the latter half of this year and into next, TSMC's 3nm production is set to see significant revenue growth in Q4 of this year and throughout 2025.

Several chips featuring TSMC's 3nm process, equipped with edge AI capabilities, have already been launched this year. These include Apple's M4 and A18 series, Intel's Lunar Lake, and MediaTek's Dimensity 9400. Anticipated releases for Q4 include Qualcomm's Snapdragon 8 Gen4 and Intel's Arrow Lake, most of which leverage TSMC's innovative N3E technology.

Looking ahead to next year, AMD plans to introduce its MI350 series and Zen5 CPUs, while Apple is expected to release its A19 series. Additionally, MediaTek and NVIDIA are collaborating on an AI PC chip, alongside MediaTek's automotive platform, the C-X1. Intel's next-generation AI chip, Falcon Shores, is also expected to utilize TSMC's N3P technology. Notably, NVIDIA's Blackwell is set for mass production next year, while Intel's flagship CPU for 2025 may revert to its in-house Intel 18A process.

According to reports from Taiwanese media, NVIDIA's order volume from TSMC is projected to exceed this year's figures, intensifying the demand for 3/5nm capacity. MediaTek and NVIDIA's AI PC chip is rumored to be developed using the 3nm process, with a launch expected in Q2 and mass production in Q3 of 2025.

Industry insiders suggest that the entry of AI chips into the 3nm market will further strain wafer fabrication capacity, particularly in advanced packaging. For instance, TSMC's CoWoS packaging for NVIDIA's B200, AMD's MI300, and Intel's Gaudi 3 chips reaches 3.3 times the size of TSMC's photomasks, yielding approximately 16 chips per wafer. Future advancements toward 5.5 times this size will likely reduce the number of chips produced even further.

While TSMC has indicated that ramping up 3nm production could dilute profit margins, significant progress in the learning curve was reported in Q2, with expectations for an even stronger Q3 performance. Analysts anticipate that the N3P process will outperform Intel's 20A in terms of power, performance, and area (PPA). With a market share nearing 100% for 3nm chips in the smartphone system-on-chip (SoC) and high-performance computing (HPC) sectors, TSMC is well-positioned to exert a substantial influence in the global HPC market.