TSMC production of 3nm chips for Apple’s iPhone and Mac computers is ramping up, despite tooling issues that impede production.

TSMC is Apple’s exclusive chipmaker. Although the company also makes chips for other companies, Apple is such a big customer that it secured TSMC’s entire first run of 3nm chips. Unfortunately, the Taiwanese company is struggling to meet demand.

The company’s yields are not yet where they need to be, with Brett Simpson, senior analyst at Arete Research, telling EE|Times that current yields are roughly 55%.

“We think TSMC will move to normal wafer-based pricing on N3 with Apple during the first half of 2024, at around $16-17K average selling prices,” Simpson said. “At present, we believe N3 yields at TSMC for A17 and M3 processors are at around 55% [a healthy level at this stage in N3 development], and TSMC looks on schedule to boost yields by around 5+ points each quarter.”

“The focus now for TSMC through this early ramp is to optimize yield and wafer cycle-times to drive efficiencies,” Simpson added.

Despite the production issues, company executives are optimistic, pointing to the groundbreaking nature of 3nm production.

“Our 3-nm technology is the first in the semiconductor industry to high-volume production with good yield,” TSMC CEO C.C. Wei said in a conference call with analysts. “As our customers’ demand for N3 [TSMC terminology for 3 nm] exceeds our ability to supply, we expect N3 to be fully utilized in 2023, supported by both HPC and smartphone applications. Sizable N3 revenue contribution is expected to start in the third quarter, and N3 will contribute a mid-single–digit percentage of our total wafer revenue in 2023.”