When TSMC announced it had begun production of its next-generation 3nm process at the end of 2022, it was widely known it had only one big customer—Apple. The company reportedly bought almost all of TSMC's first run of 3nm wafers, so it could be the first tech giant in the world to offer this technology to its customers. Now that it's announced its 3nm products for iPhone and Mac, it's becoming clearer just how much Apple had to pay for the privilege of being first in line. According to one analyst, just the tape-out process alone cost the company $1 billion.
Though Apple officially unveiled its first 3nm chip in September with the iPhone 15 Pro and Pro Max, this past week, it finally unveiled the M3 lineup of SoCs for the iMac and MacBook Pro. Though the two chip families share some design characteristics, the latter are much larger and more complex. For example, the A17 Pro chip in the iPhone 15 Pro is made with 19 billion transistors, whereas the M3 Max SoC has 92 billion transistors, so it's a whole different enchilada.
To create these chips, Apple had to loosen its purse strings considerably. One analyst estimated it coughed up $1 billion just for the final phase of the design process, called the tape-out. This is when the design is finalized, and the photomasks are created to be used in the manufacturing process.
This astronomical figure was estimated by analyst Jay Goldberg on a recent finance podcast, according to Wccftech. It indicates Apple had to spend considerably more than just that figure alone to get a multi-year head start on the rest of the industry when offering 3nm products. What's even more surprising is it's alleged Apple didn't have a sweetheart deal with TSMC, which would have allowed it to avoid paying for bad wafers. We'll never know the truth, but if Apple had to pay for all those wafers—good and bad—that would be quite a payout because it's rumored TSMC was only getting yields of around 55%.
Though these are heady figures for most tech companies, they're merely a drop in the bucket for Apple. The company reportedly has $162 billion in cash on hand, according to CNBC, and pulled in $89 billion in revenue in just the past quarter alone. For context, for the most recent quarter, Nvidia raked in $13 billion, with AMD earning $5.8 billion, so Apple is in a different tier entirely. Both GPU makers are expected to adopt TSMC's 3nm technology in the future, but only once TSMC transitions to its next iteration (N3E) with better yields, fewer layers, and a slightly lower cost.
