Apple has decided not to use TSMC's cutting-edge 2nm process node for its upcoming M5 chip due to the high costs associated with it. Instead, the company will opt for TSMC's 3nm process and a new System-on-Integrated-Chip (SoIC) technology.

The M5 chips are intended for use in the next generation of iPad Pros and Macs, with mass production scheduled for the second half of 2025. The use of SoIC technology, which involves a 3D chip-stacking approach, is expected to improve thermal management and reduce electrical leakage compared to traditional 2D designs.

This decision to move away from the 2nm node is likely due to the significant cost differences between the two processes. Apple's current M4 chips are manufactured using the 3nm process, and the new M5 chips will continue this trend.

In addition to consumer devices, the new M5 processors are also expected to be used in Apple's AI server farms. The dual-use SoIC design allows Apple to leverage its new M5 processor in its AI server infrastructure, enhancing AI capabilities across both consumer devices (like iPads and Macs) and cloud services.