The speed with which the best foundries are moving in their never-ending quest to improve the speed, performance and efficiency of smartphone chips is truly remarkable. Just this year, TSMC, the world's leading foundry, is set to begin mass production of 2nm chips. Next year, the Taiwanese company says it will begin mass production of 1.6nm chips. As these process node numbers decrease, the size of the transistors inside these chips shrinks, allowing more transistors to be installed inside them.

This is important because smaller transistors mean more of them can fit in a given area of ​​the chip. This metric, known as transistor density, usually rises when the process node goes down. The number of transistors in a chip is also important because the more transistors in a chip, the more powerful and power efficient these semiconductors are. Consider the staggering decline in process contracting that we have seen over the past few years.

TSMC is starting to pull ahead as it just announced fourth-quarter revenue rose 37% year-over-year to $26.88 billion. What TSMC calls “smartphone seasonality” will lead to a sequential decline in its top line for the first quarter of 2025 even though the first-quarter total will be up year-over-year by 34.7%.

With the production of the 2nm wafer, TSMC will begin using gate all-in-one (GAA) transistors that use vertically stacked horizontal nanosheets allowing the gate to cover all four sides of the channel to prevent leakage current and optimize drive current. The result is higher-performance chips with greater power efficiency. When it starts producing 1.6nm chips, TSMC will start backlight power delivery (BPD). BPD moves the power delivery from the front of the silicon wafer, where it leaves less room for transistors, to the back, where it is not obstructed by other wires.

The A18 Pro application processor, made using TSMC's second-generation 3nm node, powers the iPhone 16 Pro and Pro Max models. | Image credit-Apple

When will we see the first iPhone to feature an access point made using the 1.6nm node? We'll have to get back to you on that. Meanwhile, TSMC says the 1.6nm chips will provide an 8% to 10% speed improvement at the same power compared to a 2nm node.