Rumor: TSMC inks deal to build 20nm 'A8' chips for Apple starting this year

Posted:
in Future Apple Hardware edited January 2014
A new report claims that Apple and Taiwan Semiconductor Manufacturing Co. have actually sealed the deal on a three-year agreement to supply A-series chips for future iPhones and iPads.

Chips
All of Apple's iDevice chips to date have been manufactured by Samsung in Austin, Tex.


Rumors of an agreement between the two companies have continued to crop up for years, but a report published on Monday by DigiTimes not only claims a deal has been made, but gets into specifics about the terms of the contract. In particular, TSMC and its integrated service partner Global UniChip are said to be planning to supply A-series chips built on 20-nanometer, 16-nanometer, and 10-nanometer process nodes.

The report claims TSMC will begin limited trial runs of manufacturing 20-nanometer "A8" chips as soon as this July, though production won't ramp up substantially until September. It's expected that devices utilizing the so-called "A8" chip would debut in 2014.

In addition, it was said that TSMC's phase 4, 5 and 6 facilities at its Fab 14 location in southern Taiwan will be solely dedicated to building A-series chips for Apple.

It should be noted that DigiTimes is notorious for reporting rumors from the technology industry supply chain that prove incorrect. However, the publication does on occasion relay accurate claims on Apple and other companies.

For years, reports have claimed that Apple was interested in forging a partnership with TSMC ??a move that would allow the iPhone maker to cut Samsung out of its supply chain. Currently, Samsung is the sole supplier of Apple's custom A-series chips, while also being Apple's chief rival.

Monday's report does align with a rumor that surfaced earlier this year, in April, which claimed that TSMC would build 20-nanometer chips for Apple's 2014 iPhone model. However, for years reports have claimed that TSMC was on the verge of joining Apple's supply chain.

There's even been speculation that Intel could begin manufacturing A-series chips as Apple looks to broaden its supplier base. Intel is currently the sole supplier of processors for the company's Mac lineup.

Apple's first custom A-series chip, the A4, debuted in the first-generation iPad in 2010, and launched in the iPhone 4 later that year, while the A5 was introduced in the iPad 2 and later came to the iPhone 4S in 2011. Since then, new iPad models have had enhanced chips with an "X" moniker, like the A5X in the third-generation iPad and A6X in the fourth-generation model, while the A6 chip debuted last year in the iPhone 5.
«13

Comments

  • Reply 1 of 53
    macfandavemacfandave Posts: 603member
    I hope Apple gets am ironclad agreement with TSMC that, if they want to supply components to Apple, they won't also compete with Apple with consumer products.

    Apple has been f'd over during its entire history by backstabbing suppliers. Microsoft, Adobe, Motorola, Google and Samsung all got tremendous opportunties by working for Apple and then ended up showing their gratitude with betrayal and theft.

    The Microsoft debacle was a complete botch on Apple Legal's part as they got away with stealing from Apple to make Windows. Things seem to be going fairly well with the prosecution of Samsung, although justice is not yet served. I'm saddened that Apple hasn't pursued Google with thermonuclear war, as was Steve Jobs' dying wish.

    I just hope that Apple has established agreements to prevent TSMC from becoming the next Judas.
  • Reply 2 of 53
    herbapouherbapou Posts: 2,228member
    macfandave wrote: »
    I hope Apple gets am ironclad agreement with TSMC that, if they want to supply components to Apple, they won't also compete with Apple with consumer products.

    Apple has been f'd over during its entire history by backstabbing suppliers. Microsoft, Adobe, Motorola, Google and Samsung all got tremendous opportunties by working for Apple and then ended up showing their gratitude with betrayal and theft.

    The Microsoft debacle was a complete botch on Apple Legal's part as they got away with stealing from Apple to make Windows. Things seem to be going fairly well with the prosecution of Samsung, although justice is not yet served. I'm saddened that Apple hasn't pursued Google with thermonuclear war, as was Steve Jobs' dying wish.

    I just hope that Apple has established agreements to prevent TSMC from becoming the next Judas.

    I thinkthe best way to compete with google for example is not by using courts, but by competing with them. Apple maps is an example. iRadio with ads is a good example. More services with iAds will hurt them more then lawsuits.
  • Reply 3 of 53
    herbapouherbapou Posts: 2,228member
    I am confuse on the cpus. The A6 are made on what kind of plants? Those 20, 10, 8 nanometers seems very low.

    On diversification, Apple could also use AMD or Intel to have 2 suppliers.
  • Reply 4 of 53
    asciiascii Posts: 5,936member

    Quote:

    Originally Posted by herbapou View Post



    I am confuse on the cpus. The A6 are made on what kind of plants? Those 20, 10, 8 nanometers seems very low.



    On diversification, Apple could also use AMD or Intel to have 2 suppliers.


    The A6 and A6X are 32nm. Presumably the A7 will still be with Samsung, so these A8s are 2 generations away, hence the 20nm.

  • Reply 5 of 53
    DaekwanDaekwan Posts: 175member


    This is the best way to fight Samsung.  Not by suing them.. but by giving them less business.


     


    Losing the Apple Ax series of processors has to mean billions of revenue gone from Samsung's bottom line.

  • Reply 6 of 53
    Um, an agreement not to compete would not be looked at favorably from an antitrust point of view.
  • Reply 7 of 53
    bsimpsenbsimpsen Posts: 399member


    TSMC makes semiconductors, not finished products. So, it's unlikely they'd go head-to-head with Apple in the marketplace. They can, and will, produce semiconductors for Apple competitors and there is little Apple can do legally or practically to stop that.

  • Reply 8 of 53
    drblankdrblank Posts: 3,385member

    Quote:

    Originally Posted by macFanDave View Post



    I hope Apple gets am ironclad agreement with TSMC that, if they want to supply components to Apple, they won't also compete with Apple with consumer products.



    Apple has been f'd over during its entire history by backstabbing suppliers. Microsoft, Adobe, Motorola, Google and Samsung all got tremendous opportunties by working for Apple and then ended up showing their gratitude with betrayal and theft.



    The Microsoft debacle was a complete botch on Apple Legal's part as they got away with stealing from Apple to make Windows. Things seem to be going fairly well with the prosecution of Samsung, although justice is not yet served. I'm saddened that Apple hasn't pursued Google with thermonuclear war, as was Steve Jobs' dying wish.



    I just hope that Apple has established agreements to prevent TSMC from becoming the next Judas.


    TSMC doesn't make anything other than semiconductor components, solid state lighting components and solar cells.  They aren't a finished products mfg like Samscum.   


     


    Yeah, everyone knows that the companies mentioned have kind of screwed Apple one way or another, but I think it has to be that Apple wasn't big enough to warrant these companies to generate enough business without doing business with others and Apple has come up with great products that starts trends.


     


    I hope Apple is able to step up the product development since they got rid of Forstall on the iOS side and now if they can eliminate the need to rely on Samscum for critical components.

  • Reply 9 of 53
    That then implies that the A7 is an A6 with a tweaked clock speed.

    It is hard to envisage any development taking place in parallel.
  • Reply 10 of 53
    drblankdrblank Posts: 3,385member

    Quote:

    Originally Posted by herbapou View Post



    I am confuse on the cpus. The A6 are made on what kind of plants? Those 20, 10, 8 nanometers seems very low.



    On diversification, Apple could also use AMD or Intel to have 2 suppliers.


    AMD doesn't have the foundries to do it, they rely on IBM to mfg parts.


     


    I think Apple will use Intel and they might even be able to use IBM if need be.


     


    It's too bad Apple doesn't build their own plants to do it themselves, but they would have to have ultimately at least 3 or 4 plants, which would take a long time to build.  They do have the money to do it.  I think each plant is probably about $3 to $5 BIllion depending on the size.  One or two for production while the other plants are in a state of being built to handle the next gen technology and then flip flopping opening and renovating plants as time goes on.   Owning semiconductor plants is NOT cheap, plus having the knowhow and the right equipment to even make these types of products.


     


    It would be great if Sharp could do all of their panel needs for their entire product line, since both LG and Samscum make competing products with Apple.


     


    I just wish the respective governments of these component/finished product companies split them up somehow so they aren't in conflict of interest. Making components for customers and then making finished goods that compete with their component customers is a VERY unethical business model.

  • Reply 11 of 53
    macfandavemacfandave Posts: 603member
    >>Um, an agreement not to compete would not be looked at favorably from an antitrust point of view.

    Non-compete and exclusivity clauses are pretty standard in business contracts. It's not like Apple is asking TSMC to exit a business it is already in, just not to start such a unit.

    Yes, TSMC can continue to make components for other companies, but if Apple shares proprietary chip designs with them, they can insist that they are the only customers.
  • Reply 12 of 53
    jessijessi Posts: 302member

    Quote:



    Originally Posted by herbapou View Post

    I thinkthe best way to compete with google for example is not by using courts,



     


    Apple didn't have a choice:  Google sued Apple first, via its motorola division for "violating" FRAND patents it had never given Apple a chance to license.


     


    Quote:


    Originally Posted by MyDogHasFleas View Post



    Um, an agreement not to compete would not be looked at favorably from an antitrust point of view.


    Such anti-compete agreements are very common in industry.  So, I think your speculation that there is some anti-trust angle here is unfounded.  But even if there were, Taiwan is another country over which the US government does not have jurisdiction.


     


    Quote:

    Originally Posted by aBeliefSystem View Post

    That then implies that the A7 is an A6 with a tweaked clock speed. It is hard to envisage any development taking place in parallel.


    I think you're underestimating what it takes to make a CPU.  You can do a new iPhone each year without doing it in parallel (and yet, they do still do iPhone designs in parallel- the 2014 iPhone model is already under development)


     


    CPUs take 2-5 years to produce, and you pretty much have to do them in parallel.  Apple probably has 4-6 different CPU designs in various stages.  This is why Apple has been slow to move to its own completely Apple designed CPUs and worked on a custom, hand laid out core as the first complete Apple design (which they can then use in future designs while working on other aspects at a more fine detail.)


     


    I think assuming it is merely a tweaked clock speed is in error.  I'm not aware of any CPU generations in the A series that don't have more than tweaked clock speeds.  One of the things Apple is fond of doing-- but does not announce publicaly-- is the inclusion of custom co-processors.  This is a competitive advantage that they don't talk about, but there's reason to believe there are custom CPUs for image processing, video processing, voice analysis (For SIRI) video compression/decompression, etc.


     


    Quote:

    Originally Posted by drblank View Post

    I think Apple will use Intel and they might even be able to use IBM if need be.


     


    It's too bad Apple doesn't build their own plants to do it themselves, but they would have to have ultimately at least 3 or 4 plants, which would take a long time to build.  They do have the money to do it.  I think each plant is probably about $3 to $5 BIllion depending on the size. 



     


    I think a partnership with intel makes a lot of sense.  Intel are the process experts, would allow apple to leapfrog the industry if they could use intels latest processes.... the problem is, intel wants to be the company that sells its own designs at a high markup, not a foundry for rent at a low markup.


     


    Apple certainly has the money to build a foundry-- I think they tend to be closer to $10B each these days but Apple can afford that.


     


    The problem is, Apple doesn't have the process engineers and expertise to run a foundry.  They could build that as well, but it would take a lot of time.   You can't just go from new-foundry to producing AX chips in volume for the mobile device market.  It would kinda be like IBM- wealthy and technically capable-- starting a super-sonic jet program.  IBM's engineers know software so tehy'd have that part covered, but they don't have the decades of experience and patents and the tens of thousands of employees with expertise in jet engine design, airframes, etc.


     


    Personally, I think Apple should just buy intel outright!

  • Reply 13 of 53
    MacProMacPro Posts: 19,784member
    macfandave wrote: »
    I hope Apple gets am ironclad agreement with TSMC that, if they want to supply components to Apple, they won't also compete with Apple with consumer products.

    Apple has been f'd over during its entire history by backstabbing suppliers. Microsoft, Adobe, Motorola, Google and Samsung all got tremendous opportunties by working for Apple and then ended up showing their gratitude with betrayal and theft.

    The Microsoft debacle was a complete botch on Apple Legal's part as they got away with stealing from Apple to make Windows. Things seem to be going fairly well with the prosecution of Samsung, although justice is not yet served. I'm saddened that Apple hasn't pursued Google with thermonuclear war, as was Steve Jobs' dying wish.

    I just hope that Apple has established agreements to prevent TSMC from becoming the next Judas.

    My exact sentiments. Adobe should have changed their name to Judas Software back in the early 90's.
  • Reply 14 of 53
    ash471ash471 Posts: 705member

    Quote:

    Originally Posted by macFanDave View Post



    ...I'm saddened that Apple hasn't pursued Google with thermonuclear war, as was Steve Jobs' dying wish.



     


    I hope that Apple someday takes a chunk of Google's search business. That would be way better than a patent infringement case.  Beat them up in the market.


    To do that, Apple would need to revolutionize search, which I think they can do using the iOS platform.  I have a few ideas how to do it....

  • Reply 15 of 53
    ash471ash471 Posts: 705member

    Quote:

    Originally Posted by drblank View Post


    It's too bad Apple doesn't build their own plants to do it themselves, ...


     



    That would be a terrible thing to do.  A good business emerges from a group of people with experience, knowledge, and talent.  Money can't buy everything.  Microsoft is a good example of how throwing good money after bad doesn't help.  The only reason you think Apple is competent to start a fab is because Apple doesn't do things that it doesn't know how to do and so you haven't seen them fail. 


    I suppose they could buy an existing business, but what would be the point of that?

  • Reply 16 of 53
    abazigalabazigal Posts: 114member

    Quote:

    Originally Posted by drblank View Post


     


    It's too bad Apple doesn't build their own plants to do it themselves, but they would have to have ultimately at least 3 or 4 plants, which would take a long time to build.  They do have the money to do it.  I think each plant is probably about $3 to $5 BIllion depending on the size.  One or two for production while the other plants are in a state of being built to handle the next gen technology and then flip flopping opening and renovating plants as time goes on.   Owning semiconductor plants is NOT cheap, plus having the knowhow and the right equipment to even make these types of products.



    The problem is that designing your own chips isn't cheap, and the only way to recoup your investment is to subsidise the cost over a very large install base (unfortunately, even larger than the current combined sales of IOS devices every year). Not to mention having to hire all those engineers, plus reinventing the wheel a lot for what is arguably a fairly limited benefit. This is why the industry is dominated by a few processor companies. The barriers to entry is simply too high.


     


    It would be like the whole maps saga all over again, and with way higher stakes (the fallout from a problematic chip design in a phone would be way more serious than from a crappy maps app). 


     


    That said, I believe there will eventually come a time when Apple must decide to either manufacture its own chips in-house, or buying them wholesale from the dominant manufacturer on the market. Given how Apple has been burned by Samsung, I don't blame them for at least entertaining such an option.


     


    As for Google, I think Apple feels that the best way to fight back would be to hit them where it hurts - their ad revenue. After all, Google reportedly earns way more on IOS than its own Android platform (ironic when you consider the market share). Apple is systematically removing all traces of Google's services from IOS (first with Maps, followed by youtube, now on Siri, and I think it is only a matter of time before they use Yahoo as default search option in Safari, not to mention all the services integrated into IOS can be construed as promoting alternatives to Google's own services). 


     


    Begun the ecosystem wars have. :D

  • Reply 17 of 53
    MacProMacPro Posts: 19,784member
    abazigal wrote: »
    The problem is that designing your own chips isn't cheap, and the only way to recoup your investment is to subsidise the cost over a very large install base (unfortunately, even larger than the current combined sales of IOS devices every year). Not to mention having to hire all those engineers, plus reinventing the wheel a lot for what is arguably a fairly limited benefit. This is why the industry is dominated by a few processor companies. The barriers to entry is simply too high.

    It would be like the whole maps saga all over again, and with way higher stakes (the fallout from a problematic chip design in a phone would be way more serious than from a crappy maps app). 

    That said, I believe there will eventually come a time when Apple must decide to either manufacture its own chips in-house, or buying them wholesale from the dominant manufacturer on the market. Given how Apple has been burned by Samsung, I don't blame them for at least entertaining such an option.

    As for Google, I think Apple feels that the best way to fight back would be to hit them where it hurts - their ad revenue. After all, Google reportedly earns way more on IOS than its own Android platform (ironic when you consider the market share). Apple is systematically removing all traces of Google's services from IOS (first with Maps, followed by youtube, now on Siri, and I think it is only a matter of time before they use Yahoo as default search option in Safari, not to mention all the services integrated into IOS can be construed as promoting alternatives to Google's own services). 

    Begun the ecosystem wars have. :D

    Marginalizing Google on all Apple devises is definitely a good move I agree. It has been much discussed I know but I keep wondering if Apple might do well to just buy Yahoo.
  • Reply 18 of 53
    flaneurflaneur Posts: 4,526member
    Marginalizing Google on all Apple devises is definitely a good move I agree. It has been much discussed I know but I keep wondering if Apple might do well to just buy Yahoo.

    Yeah, but a python swallowing a pig is a terrible thing to watch, and it goes on for a long time. : )
  • Reply 19 of 53
    Every day since 2 weeks now I read every time good news about Apple on this website.
    And every day, with almost no exception, I see the price of AAPL stock go down...today 12 points !

    I'm seriously in doubt about the future of Apple, looking at their WWDC conference I'm no longer confident that they have the "touch" that Steve had in his time.

    I wonder if you guys feel the same way,,,,
  • Reply 20 of 53
    richard getzrichard getz Posts: 1,142member


    Apple should NOT go with Intel as they will have the same issue as they have with Samsung. You don't want Intel to have your latest designs that they can then easily put into their own mobile chips. 


     


    Owning their own fab could prove to be a great investment. Competitors would know nothing about your product until release. Any profit made by Samsung currently would be absorbed by Apple. This also answers the cost of the fab concern, as if Samsung can produce the Ax chip at a profit then Apple could cut the middleman out completely. 


     


    There is the question of engineers, but I'm sure with Apple's reputation they could easy hire who they needed. Perhaps they will move to TSMC in the short term. Perhaps they move to TSMC, like them so much, that they buy heavily into them. 


     


    One of the bigger advantages Apple has moving forward is placing tech into their devices that others can't get. Chips that are highly customized to Apple's needs that also have unique tech, could easily put others behind, not just in tech offered, but price they can offer it. As mentioned above, incorporating different processors onto one core also saves space and energy, which is something competition would not be able to match quickly. As mentioned before, and above, having dedicated cores for processes such as Siri really could give huge advantages. 


     


    This is what I am most excited about from Apple. The ability to leapfrog everyone on technology they simply just can't get, putting Apple 2-3 years ahead in those ares. This of course won't come until Apple moves from Samsung. 

Sign In or Register to comment.