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TSMC's big expectations for its 20nm chips suggest negotiations with Apple

post #1 of 13
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Officials at Taiwan Semiconductor Manufacturing Co. have high hopes for their forthcoming 20-nanometer chip production process, fueling speculation that Apple plans to adopt the company's chips for its iPhone and iPad starting in 2014.

Apple's anticipated switch to TSMC from its current chip provider Samsung has been rumored for years, but has not yet become a reality. TSMC CEO MOrris Chang made a bullish prediction last week that its 20-nanometer chips, which will go into production in 2014, will outsell its existing 28-nanometer chips in the first two years.

Chip


Chang declined to comment specifically on the Apple-related rumors, according to The New York Times, but he did indicate that TSMC has had "enough discussions" with "enough customers" to indicate sales of the 20-nanometer chips will be "very large."

Those comments have led market watchers to presume that Apple will become a TSMC client next year, and will adopt the 20-nanometer chips in future iPhones and iPads. Currently all of Apple's custom chips for iOS devices ? including the A6 processor in the iPhone 5 and the A6X that powers the fourth-generation iPad ? are made by Samsung.

Apple's interest in leaving Samsung stems from the fact that in addition to making chips, displays and other crucial components, the company also competes with Apple by making its own phones, tablets, computers and other devices. The companies are engaged in a number of patent infringement suits, in which each has accused the other from copying its devices and stealing technology.

Patrick Liao, an analyst with Nomura Securities, said that the threat of "technology theft" is precisely why companies such as Nvidia and AMD turn to TSMC to make their chips instead of Samsung. That's because TSMC's chips are made by contract, and there's no indication that the company is interested in building its own consumer electronics like Samsung does.

If predictions of a 2014 debut for TSMC chips in Apple products are true, it would disprove a rumor from earlier this month that claimed TSMC had been contracted to build A6X chips for Apple this quarter.

Rumors also surfaced last month pegging TSMC has the most likely company behind a mysterious "Project Azalea" that numerous states are competing to win. The secretive project involves an unnamed semiconductor manufacturing company considering a new chip fabrication plant in four potential states: New York, California, Texas and Oregon.

The chip manufacturer behind the "Azalea" project is said to have ties to Apple, which has led numerous reports to suggest TSMC as the most likely company behind the mystery project. The states bidding for the contract have signed nondisclosure agreements, making the company unknown.
post #2 of 13
It isn't accurate to suggest Apple's beef with Samsung is that it makes competing phones. Apple wouldn't care about that. Apple's beef with Samsung is it gained its market status by blatantly using Apple's designs. It was easy for Samsung to do being that it had early access to many of the components used in the product.
post #3 of 13
Quote:
Originally Posted by AppleInsider View Post

The secretive project involves an unnamed semiconductor manufacturing company considering a new chip fabrication plant in four potential states: New York, California, Texas and Oregon.

Can't be Texas. Texas is that foreign place where patent trolls lurk in "courts" (which is some kind of dungeon, I guess).

Don't go there, out there be monsters.

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #4 of 13
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Originally Posted by lightknight View Post

Can't be Texas. Texas is that foreign place where patent trolls lurk in "courts" (which is some kind of dungeon, I guess).

Don't go there, out there be monsters.

Yea, but can't you just shoot them?

post #5 of 13
Samsung have cut back massively on new fab equipment. From what they're buying, there is no doubt they are planning for a lot less foundry business than previously.

I'm certain Apple have already told them they are switching to another supplier.
post #6 of 13
Originally Posted by AppleInsider View Post
Those comments have led market watchers to presume that Apple will become a TSMC client next year, and will adopt the 20-nanometer chips in future iPhones and iPads.

 

Ya think?

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post #7 of 13
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Originally Posted by PaulMJohnson View Post

Samsung have cut back massively on new fab equipment. From what they're buying, there is no doubt they are planning for a lot less foundry business than previously.

I'm certain Apple have already told them they are switching to another supplier.

 

The competitor of my frenemy is my BFF. Or something.

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post #8 of 13
Apples demand for chips could easily exceed 200 million so I have to imagine that that is a contract everybody and their brother is after. 200 million could be on the low side if they continue to offer new iOS devices that drive sales upward. That should be enough to keep a decent size plant in operation for some time.

However TSMC outlook really doesn't imply Apple, they already have had capacity issues serving the current customer base. Almost every major company on their books could benefit from a 20nm process. AMD especially could be one of the companies driving this outlook as they have a number of SoC and GPUs on the way. This is a big deal for AMD as the setbacks at Global foundries have impacted AMDs ability to enter new markets and to compete against Intel in old markets.

So while we can rightfully speculate that Apple is driving sales at TSMC it isn't a given that they are the only company doing so. The shrink to 20nm will make devices with far higher integration possible which will drive the movement to SoC techniques.
post #9 of 13

Goodbye Slamslung!

An Apple man since 1977
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An Apple man since 1977
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post #10 of 13
Quote:
Originally Posted by PaulMJohnson View Post

Samsung have cut back massively on new fab equipment. From what they're buying, there is no doubt they are planning for a lot less foundry business than previously.

I'm certain Apple have already told them they are switching to another supplier.


Out of curiosity where did you read that?

post #11 of 13
Quote:
Originally Posted by hmm View Post


Out of curiosity where did you read that?

 

I spent 15 years working in the semiconductor capital equipment industry, and I still know a hell of a lot of people in the industry.  Believe me, it's true......

post #12 of 13

I have no doubt that Apple is looking at moving their SoC production TSMC, just want to chime in on the logic here.

 

It's doesn't follow that since TSMC expects big production from its 20 nm node, and its 28 nm node, in 2013/2014 means that Apple is going to TSMC. With Qualcomm's SoC looking like they are winning the ARM SoC war, smartphone units still growing, and tablets exploding, it should be a no-brainer that TSMC should expect to have big orders for both 28 nm parts and 20 nm parts in 2014. Doesn't seem indicative of TSMC taking on Apple as a customer.

 

Heck, with Intel not selling its fab capability, and Samsung/GF either a half node behind or late, TSMC's got a big edge in the foundry business since they have the most advanced node with the best schedule, right? There doesn't seem to be much of competition.

post #13 of 13

We can speculate all day long but Apple may simply need a second source.   Sky's the limit as far as iPad sales go, just imagine school districts adopting these tablets on a grander scale.  

Quote:
Originally Posted by THT View Post

I have no doubt that Apple is looking at moving their SoC production TSMC, just want to chime in on the logic here.

 

It's doesn't follow that since TSMC expects big production from its 20 nm node, and its 28 nm node, in 2013/2014 means that Apple is going to TSMC. With Qualcomm's SoC looking like they are winning the ARM SoC war, smartphone units still growing, and tablets exploding, it should be a no-brainer that TSMC should expect to have big orders for both 28 nm parts and 20 nm parts in 2014. Doesn't seem indicative of TSMC taking on Apple as a customer.

 

Heck, with Intel not selling its fab capability, and Samsung/GF either a half node behind or late, TSMC's got a big edge in the foundry business since they have the most advanced node with the best schedule, right? There doesn't seem to be much of competition.

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