It is not a secret that it is extremely hard to get AMD's latest Radeon RX 6800/6800 XT graphics cards and Ryzen 5000-series processors (see our article on how and where to find Radeon RX 6800 XT and how and where to find Ryzen 5000). Officially, the company says that demand for these parts is so high that it greatly exceeds supply. Meanwhile, a media report says that AMD cannot get additional chips from Taiwan Semiconductor Manufacturing Co. because the foundry is busy making chips for Apple's latest devices as well as new consoles from Microsoft and Sony.
Leading-Edge Capacities Fully Booked
TSMC can process a relatively limited number of wafers using its leading-edge 5 nm and 7 nm process technologies. Therefore, all of TSMC's clients that need these nodes sign wafer purchase agreements to allocate a certain number of contract wafers per quarter. Such agreements are signed many quarters before (and in case of alpha customers, who get access to leading-edge processes ahead of everyone else, years before) actual production starts and cannot be changed overnight. Large companies tend to commit for huge volumes, whereas smaller players usually allocate a lower number of wafers.
For Q4 2020, all of TSMC's 5-nm and 7-nm capacities have been booked, according to a report from Commercial Times, which did not disclose its sources. TSMC's board of directors recently approved a plan to expand its leading-edge capacities, but it will take months before new equipment is installed.
Apple's Need for Chips
In the recent years Apple and Huawei's HiSilicon were TSMC's alpha customers for leading-edge nodes and could access these technologies before others. Now that TSMC cannot supply chips to Huawei, Apple booked all of the foundry's 5-nm capacity for its own A14 system-on-chips for iPhone 14 and iPad Air 4 as well as M1 SoCs for the latest Macs, the report claims. The story says that TSMC is contracted to ship 150,000 wafers containing A14 SoCs and 18,000 wafers with M1 processors in Q4 2020. These numbers cannot be verified as contractual obligations are confidential.
Since Apple's A14 does not have a built-in modem, it is paired with Qualcomm's X55 modem that is made by TSMC using one of its 7 nm manufacturing technologies. Since Apple sells boatloads of iPhones and Qualcomm itself ships tons of its own 7-nm mobile SoCs to various customers, the company became TSMC's largest 7-nm client in Q4 2020. Qualcomm's shipment of X55 modems to Apple alone is projected to total 80,000 wafers this quarter, Commercial Times reports.
The New Consoles
AMD is considerably smaller than Apple or Qualcomm in terms of volumes, so it never allocates (or rather cannot allocate) the number of wafers that SoC companies do. Meanwhile, in Q3 and Q4 2020, the company has to supply certain pre-ordered 7 nm SoCs for Microsoft's Xbox Series X/S as well as Sony's PlayStation 5 game consoles. Since AMD has supply agreements with its console partners, it has to prioritize production of their SoCs over its own CPUs and GPUs in a bid to enable Microsoft and Sony to ramp up production of their new game machines.
Commercial Times claims that AMD is contracted to ship around 120,000 wafers containing SoCs for the latest game consoles (40,000 to Microsoft and 80,000 to Sony) in Q4 2020. Meanwhile, AMD's contracted 7 nm allocation for the fourth quarter is about 150,000, the report says, which essentially means that 80% of AMD's 7 nm wafers will be used for consoles.
Can't Get Enough?
Demand for PCs, computer hardware, game consoles, and other digital devices is indeed very high these days as many people now work from home and entertain themselves at home. Such demand could not be predicted several quarters ago, so it is not particularly surprising that there are shortages of the latest hardware and game consoles.
If the numbers reported by Commercial Times are correct, then most of the 7 nm chips produced for AMD this quarter will go to Microsoft and Sony as per contracts, whereas some previous-generation 7 nm products will be shipped to PC OEMs in accordance with obligations. As a consequence, only some wafers will be left for AMD's new Radeon RX 6000 as well as Ryzen 5000-series products. Keeping in mind that TSMC's 5 nm and 7 nm capacities have been fully booked for Q4, AMD cannot order any additional wafers just now.
A Huge Grain of Salt
While the claim that AMD cannot get enough Big Navi and Vermeer chips because TSMC's production capacities are busy making chips for Apple (the company still consumes 7 nm SoCs), Qualcomm, Microsoft, and Sony sounds reasonable, it should be noted that the number of wafers shipped by TSMC to its clients cannot be verified. Furthermore, actual allocation of wafers to a particular company is a trade secret and nobody will ever confirm it.
If the numbers published by Commercial Times are inaccurate, then the whole story either contains inaccuracies, or is completely wrong.
But What About Nvidia?
AMD is not the only company that cannot meet demand for its latest products these days. Nvidia's latest GeForce RTX 30-series 'Ampere' graphics cards are in very tight supply (see where and how to buy an RTX 3080, 3070 or 3090). Since it is so hard to buy the new cards from official channels, the scalping industry flourished in the recent months.
Nvidia produces its GA102 and GA104 graphics processors at Samsung Foundry using 8N process technology. It is unknown how much capacity Samsung has for its N8 node and how many wafers for Nvidia it can process. Meanwhile, Nvidia said that demand for its latest GeForce RTX 3070/3080/3090 products greatly exceeded its ability to supply, which is why shortages would continue into 2021.
Bottom Line
It is evident that demand for high-tech products is high these days as people spend more time at home. Some products are in short supply because of insufficient production volumes and others are rare because of scalpers (yet again, scalpers can only make profit if a product is in tight supply). But the sad fact is that numerous companies that cannot meet demand for their products now are also not going to meet it for quite some time.
