Next year's iPhone 17 series will feature processors made using TSMC's enhanced N3P 3-nanometer chip technology, but only iPhone 18 Pro models in 2026 are likely to use the Taiwanese chipmaker's next-generation 2nm processor technology because of cost concerns, according to Apple analyst Ming-Chi Kuo.
The terms "3nm" and "2nm" describe generations of chip manufacturing technology, each with its own set of design rules and architecture. As these numbers decrease, they generally indicate smaller transistor sizes. Smaller transistors allow more to be packed onto a single chip, typically resulting in increased processing speed and improved power efficiency.
Last year, Apple adopted 3-nanometer chips for its iPhones and Macs. Both the A17 Pro chip in the iPhone 15 Pro models and the M3 series chips in Macs are built on the 3-nanometer node, an upgrade over the prior 5nm node. This year's iPhone 16 series uses an A18 chip which is built using a second-generation 3-nanometer process, so it is more efficient and faster than the A16 Bionic chip used in the iPhone 15 models.
TSMC plans to start manufacturing 2nm chips in late 2025, and Apple is expected to be the first company to receive chips built on the new process. TSMC is building two new facilities to accommodate 2nm chip production, and working on approval for a third. TSMC generally builds new fabs when it needs to increase production capacity to handle significant orders for chips, and TSMC is expanding in a major way for 2nm technology.
TSMC is investing billions in this new chip technology, while Apple must adapt its chip designs accordingly. As TSMC's largest customer, Apple usually gets priority access to the latest chips. For instance, in 2023, Apple purchased all of TSMC's initial 3-nanometer chip production for its iPhones, iPads, and Macs. This partnership often allows Apple to integrate cutting-edge semiconductor technology into its products before competitors.
In between the 3nm and 2nm nodes, TSMC will introduce several new 3nm improvements. TSMC has already come out with N3E and N3P chips that are enhanced 3nm processes, and there are other chips in the works such as N3X for high performance computing and N3AE for automotive applications.
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