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In the quarter ended December 31, 2023, TSMC’s 3nm process accounted for 15% of wafer revenue, up from 6% in the prior quarter. The 5nm process supplied 35%, twice the 7nm share of 17%. The figures show a clear shift toward newer manufacturing technologies—but they are shares of wafer revenue, not chip volumes, customer revenue, or proof that company-wide sales were booming.
TSMC’s Q4 2023 process mix
TSMC reported that advanced technologies—its definition is 7nm and more advanced—made up 67% of wafer revenue in Q4 2023. The three largest named advanced-node categories were:
| Process technology | Q3 2023 | Q4 2023 | Q4 change |
|---|---|---|---|
| 3nm | 6% | 15% | +9 percentage points |
| 5nm | Not needed for the headline comparison | 35% | — |
| 7nm | Higher than Q4 | 17% | — |
| 7nm and more advanced | 59% | 67% | +8 percentage points |
The Q4 figures are from TSMC’s earnings presentation filed with the SEC. The 3nm share rose 9 percentage points quarter over quarter. That is a substantial mix change, but 3nm was still smaller than 5nm, which remained the largest individual process category.
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The crossover between 5nm and 7nm was not limited to the December quarter. For full-year 2023, 5nm represented 33% of wafer revenue and 7nm 19%; 3nm contributed 6%. In other words, 5nm was ahead of 7nm both in Q4 and across the year. TSMC’s Q4 management report provides the annual process mix.
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What “wafer-revenue share” means
These percentages describe the share of TSMC’s wafer revenue attributed to process technologies. They are not percentages of total consolidated revenue by customer or product, and they do not reveal the number of wafers or chips made on each node. Nor are they market-share figures for the global foundry industry.
A process’s percentage can fall even if its absolute sales do not: a newer process can grow faster and take a larger portion of the total. So the 7nm share of 17% does not, by itself, prove that 7nm wafer revenue declined in dollars or that its utilization collapsed. TSMC does not publish a complete customer-by-node revenue table in these earnings materials, so the mix cannot establish which customer drove a particular change.
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Likewise, “3nm,” “5nm,” and “7nm” are process-generation labels, not direct measurements of every transistor dimension. The labels can cover multiple process variants, and a given number should not be treated as an automatic apples-to-apples comparison between foundries.
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Why 3nm gained share—and why 5nm still mattered
TSMC cited the continued ramp of its 3nm technology as a support for the business. The increase from 6% to 15% indicates that the newer process had become a materially larger contributor to wafer revenue by Q4. But the result does not identify all the products or customers behind that increase. Customer-specific claims require separate sourcing; TSMC’s earnings disclosures do not provide a full customer-by-node breakdown.
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At 35%, 5nm remained the biggest single process category. The combined 3nm and 5nm share was 50%; adding 7nm brings the total to 67%, matching TSMC’s advanced-technology measure. That makes the quarter a broad leading-edge mix story, rather than a story of 3nm replacing 5nm overnight.
For 2023, TSMC’s platform mix was 43% high-performance computing, 38% smartphones, 8% Internet of Things, 6% automotive, 2% digital consumer electronics, and 3% other, according to its annual report. Those figures show the business served both computing and mobile markets, but they do not map any platform exclusively to a particular process node.
A more advanced mix did not mean an across-the-board boom
TSMC’s consolidated Q4 revenue was NT$625.53 billion, or US$19.62 billion. U.S.-dollar revenue rose 13.6% from Q3 but was down 1.5% from Q4 2022. Net income was NT$238.71 billion, diluted EPS was NT$9.21, and gross margin was 53.0%, according to the earnings release.
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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsThe quarter therefore combined sequential recovery with year-over-year softness. Meanwhile, the process mix shifted further toward advanced technologies. The two trends are compatible: customers can migrate products to newer processes while the overall semiconductor market is still recovering unevenly.
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Node mix alone also cannot settle the profitability question. Newer processes may command higher prices, but ramping them can involve depreciation, yield learning, and other start-up costs. TSMC did not disclose node-level margins in these materials. Utilization, pricing, product mix, currency movements, customer demand, and capital costs all affect total earnings.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What TSMC said about 2024
In its 2024 outlook, management pointed to the continued 3nm ramp, strong 5nm demand, and robust AI-related demand as potential supports for growth. These were forward-looking expectations, not guaranteed outcomes or a quantified account of how much Q4 revenue came from AI chips. The company’s 2023 annual report and Q4 results materials provide the company’s context and outlook.
For investors and industry watchers, the useful questions were whether 3nm could keep expanding beyond its initial ramp, whether 5nm demand would remain durable, and whether the declining 7nm share reflected ordinary product migration or weakness in older-node demand. The Q4 mix offered evidence of a leading-edge transition; it could not answer those questions on its own.
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- Constructive signal: 3nm’s share increased sharply, while 5nm remained a large contributor. Together, 3nm and 5nm made up half of wafer revenue.
- Important qualification: The percentage mix does not show unit volumes, node-level profit, customer concentration, or the absolute dollar change in 7nm revenue.
- Cycle check: Sequential revenue improved, but U.S.-dollar revenue was still lower than a year earlier, and full-year revenue declined.
- Outlook, not certainty: Management expected 3nm, 5nm, and AI demand to support 2024; those expectations should be judged separately from the historical Q4 figures.
For full-year perspective, TSMC reported 3nm at 6%, 5nm at 33%, and 7nm at 19% of wafer revenue. Total 2023 revenue was NT$2,161.74 billion, down 4.5% year over year; net income was NT$838.50 billion and diluted EPS NT$32.34. Advanced technologies accounted for 58% of wafer revenue, up from 53% in 2022. The combination—more advanced mix alongside lower annual revenue—underscores why technology migration and the broader business cycle should not be confused.
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