Apple price demands for next-gen iPhone's 'A9' chip could slow TSMC output

Posted:
in iPhone edited August 2015
Apple is asking Samsung and TSMC to accept price cuts on orders of A9 chips for its new iPhones, but TSMC's inclination to decline could result in the supplier having to scale back production capacity, a new rumor claimed on Tuesday.




Both Samsung and TSMC have 14- and 16-nanometer FinFET capacity ready to go for the A9, supply chain sources indicated to DigiTimes. Samsung has reportedly agreed to Apple's demands, going so far as to provide "almost-free" backend services for the chips, with the hope of becoming Apple's primary source.

TSMC has been more hesistant, the sources said, and if so might have to cut back on a planned 16-nanometer ramp-up in August from 30,000 wafers to less than 20,000. Orders from companies wanting similarly-sized chips would allegedly be too small to make up for the gap left by reduced Apple orders.

TSMC has reportedly insisted that the ramp of its 16-nanometer production is going ahead according to plan.

DigiTimes has a spotty track record on predicting Apple's future product plans, but it does have sources inside the Far East supply chain who have provided accurate information on Apple's partners.

Full-scale production of new iPhones may be imminent or already underway if Apple is planning to announce new devices on September 9. Recently, though, KGI Securities analyst Ming-Chi Kuo claimed that production would be delayed one or two weeks, even with capacity for older models being diverted.

Comments

  • Reply 1 of 13
    Spotty track record?
    More like a leopard of track records.
  • Reply 2 of 13
    SpamSandwichSpamSandwich Posts: 30,562member
    DigiTimes propaganda.
  • Reply 3 of 13
    512ke512ke Posts: 781member

    most negative articles about Apple ever in one 24 hour period, this is a new record?

  • Reply 4 of 13
    maestro64maestro64 Posts: 4,414member
    Oh lets see normal negotiation Apple tells supplier unless they can get this price they are giving the business to another supplier. There is no story here and until someone takes apart the A9 no one will know for sure who got the business.

    Remember there were rumors that Samsung has 40% of the A8 business but no one found a single chip made by Samsung. I believe the 40% business that Samsung got was all the A7, A6 and A5 chips which Apple is still put in older products. THe only questions is will Apple swith back to Samsung since they plan to stop shipping products with the older processors and it would not make sense to load up TSMC with both the A8 and A9.
  • Reply 5 of 13
    cnocbuicnocbui Posts: 3,613member
    Quote:

    Originally Posted by 512ke View Post

     

    most negative articles about Apple ever in one 24 hour period, this is a new record?




    How is this negative regarding Apple?  If true, it means they are getting A9 chips at bargain basement so this would be a big positive for their profit margin.

  • Reply 6 of 13
    Apple needs to be careful here.

    Don't starve TMSC. Samsung of course is willing to cut now in order to kill off competition and use Apple income later to steal and compete.
    Samsung has so many businesses that it can afford even a loss. This is TSMCs bread and butter.

    Pay TMSC a fair amount, earning loyalty and also protecting from reliance on a known enemy.
  • Reply 7 of 13
    solipsismysolipsismy Posts: 5,099member
    I'm still waiting for that, "APPLE [upcoming product] COMPONENT PRODUCTION EXCEEDS EXPECTATIONS" article.
  • Reply 8 of 13
    roakeroake Posts: 620member
    Quote:
    Originally Posted by SolipsismY View Post



    I'm still waiting for that, "APPLE [upcoming product] COMPONENT PRODUCTION EXCEEDS EXPECTATIONS" article.

     

     

    You are more likely to see, "Apple now producing their own components after previously undisclosed corporate buyouts in several countries."  Well, if we were talking about the real world, anyway.

     

    I miss all the Apple-the-underdog stories.  Now it's Apple-is-the-evil-megacorporation stories.

  • Reply 9 of 13

    Apparently, nobody seems to understand that you can only design a silicon component (especially a component this complex) for a very specific process. This means 100% TSMC (more likely) or 100% samsung (less likely).

  • Reply 10 of 13
    realisticrealistic Posts: 1,121member
    Quote:

    Originally Posted by AppleInsider View Post



    Apple is asking Samsung and TSMC to accept price cuts on orders of A9 chips for its new iPhones, but TSMC's inclination to decline could result in the supplier having to scale back production capacity, a new rumor claimed on Tuesday.

     





    Both Samsung and TSMC have 14- and 16-nanometer FinFET capacity ready to go for the A9, supply chain sources indicated to DigiTimes. Samsung has reportedly agreed to Apple's demands, going so far as to provide "almost-free" backend services for the chips, with the hope of becoming Apple's primary source.



    TSMC has been more hesistant, the sources said, and if so might have to cut back on a planned 16-nanometer ramp-up in August from 30,000 wafers to less than 20,000. Orders from companies wanting similarly-sized chips would allegedly be too small to make up for the gap left by reduced Apple orders.



    TSMC has reportedly insisted that the ramp of its 16-nanometer production is going ahead according to plan.



    DigiTimes has a spotty track record on predicting Apple's future product plans, but it does have sources inside the Far East supply chain who have provided accurate information on Apple's partners.



    Full-scale production of new iPhones may be imminent or already underway if Apple is planning to announce new devices on September 9. Recently, though, KGI Securities analyst Ming-Chi Kuo claimed that production would be delayed one or two weeks, even with capacity for older models being diverted.



    This article has to be total BS. A supposed Sept 9th release date and they are still negotiating on chip pricing, not likely. if Sept is the date then pricing, orders and negotiations were over long ago.

  • Reply 11 of 13
    solipsismysolipsismy Posts: 5,099member
    realistic wrote: »

    This article has to be total BS. A supposed Sept 9th release date and they are still negotiating on chip pricing, not likely. if Sept is the date then pricing, orders and negotiations were over long ago.

    I agree it's likely BS, but note that Sept 9th is the announcement date. The release date would probably be a week and a half later.
  • Reply 12 of 13
    joshajosha Posts: 901member
    Quote:

    Originally Posted by 9secondko View Post



    Apple needs to be careful here.



    Don't starve TMSC. Samsung of course is willing to cut now in order to kill off competition and use Apple income later to steal and compete.

    Samsung has so many businesses that it can afford even a loss. This is TSMCs bread and butter.



    Pay TMSC a fair amount, earning loyalty and also protecting from reliance on a known enemy.



    I'm sure Apple has this as a significant consideration.

    For Samsung to get control of Apple's parts, could be very negative to Apple's business.

    I feel it would be best to use Samsung for older model devices, where knowledge of same would least affect Apple.

  • Reply 13 of 13
    ksecksec Posts: 1,543member
    Quote:

    Originally Posted by JoshA View Post

     



    I'm sure Apple has this as a significant consideration.

    For Samsung to get control of Apple's parts, could be very negative to Apple's business.

    I feel it would be best to use Samsung for older model devices, where knowledge of same would least affect Apple.


     

    Exactly my thought as well. May be the A8 will be redone with Samsung 14nm tech. To fit those in iPhone 6C, Apple TV or iPad Mini.

     

    Having said that, sometime i think the cost of SoC is pretty marginal in the whole picture. Compared to Screen, cover glass, Baseband, Wifi / Bluetooth, NAND and Memory.

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