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On February 21, supply chain sources said that while TSMC's overall capacity utilization in the first half of 2023 is down significantly, the higher-priced 3nm (N3) process is indeed better than expected in terms of customers, shipments and yields, as TSMC said.

Apple has reportedly taken up 100% of TSMC's current N3 capacity for the upcoming A17 and M3 chips, with Qualcomm and MediaTek lining up behind. On top of that, TSMC's more power-efficient N3E process is about to go into production.

TSMC announced last year that it was starting mass production of 3nm chips at its new Fab 18 facility in the Tainan Science Park, which is expected to be used for mass production of A17 Bionic and M3 chips (naming unknown).

Not surprisingly, the next generation A17 Bionic chips will be dedicated to the upcoming iPhone 15 Pro and iPhone 15 Pro Max / Ultra models, while the M3 will be dedicated to the new MacBook models coming in the fourth quarter of this year.

Qualcomm and MediaTek are said to be following Apple in terms of priority, but the report doesn't say whether they will use the same N3 technology to mass produce Snapdragon 8 Gen 3 or the new flagship platform from Tiangui, but we think it's highly unlikely, as these new platforms will have difficulty securing capacity after their launch at the end of the year if they use N3.

Based on what we know, TSMC's N3E node is more mainstream than N3 and should also be available to major customers including Apple, Qualcomm and MediaTek, while N3E will further expand the N3 family with improved performance, power and yields.

TSMC says that the 3nm node will offer 1.6x and 1.7x higher logic density compared to 5nm, but at the same significant cost increase. N3 offers up to 15% performance improvement and up to 30% energy efficiency improvement compared to N5, while N3E will further extend the power advantage, so let's just hope the price of this year's iPhone 15 Pro series doesn't go up too much.