Apple keeping TSMC processors in iPhone and iPad at least through 2020, but risk remains
While Apple's relationship with TSMC relationship is expected to continue, analysts find the pair are heavily dependent on one another, in a way that holds risk for both companies.
Apple is expected to keep TSMC as its sole provider of application processors for the iPhone and iPad for the next two years, according to industry analysts cited by EE Times in Taiwan.
Apple has used TSMC as a chipmaker since 2014. Reports in January had TSMC reaching a deal to provide all of the "A12" chips for the 2018 iPhone lineup, and production began in May.
The Apple/TSMC relationship, while it's been lucrative for both parties, remains risky for them as well. Apple does not have a backup supplier for the chips, nor has it moved to diversify its supply chain for them, the way it's begun to for screen panels and other components.
As for TSMC, it is heavily dependent on Apple, which provides about 75 percent of its business. And, while Apple is in a position where it could conceivably move on to a different supplier at some point, TSMC would likely find themselves in huge trouble if Apple ever walked away.
This is not without precedent. Imagination, a British firm that formerly designed the GPU in the iPhone, iPad and Apple Watch, put itself up for sale last year after Apple dropped them, ultimately selling to Canyon Bridge Capital Partners. Another supplier, Dialog Semiconductor, has seen its stock drop based on rumors that Apple may change how it handles power management chips.
However, according to EE Times' sources, there aren't many rivals out there likely to take away TSMC's Apple business, as neither Samsung or Intel is seen as having much chance to replace them.
TSMC, back in July, trimmed its outlook for the year. While this was attributed at the time to a decline in demand for chips used in cryptocurrency mining, the 2018 iPhone cycle is seen as crucial in helping them recover from a bad quarter.
Apple is expected to keep TSMC as its sole provider of application processors for the iPhone and iPad for the next two years, according to industry analysts cited by EE Times in Taiwan.
Apple has used TSMC as a chipmaker since 2014. Reports in January had TSMC reaching a deal to provide all of the "A12" chips for the 2018 iPhone lineup, and production began in May.
The Apple/TSMC relationship, while it's been lucrative for both parties, remains risky for them as well. Apple does not have a backup supplier for the chips, nor has it moved to diversify its supply chain for them, the way it's begun to for screen panels and other components.
As for TSMC, it is heavily dependent on Apple, which provides about 75 percent of its business. And, while Apple is in a position where it could conceivably move on to a different supplier at some point, TSMC would likely find themselves in huge trouble if Apple ever walked away.
This is not without precedent. Imagination, a British firm that formerly designed the GPU in the iPhone, iPad and Apple Watch, put itself up for sale last year after Apple dropped them, ultimately selling to Canyon Bridge Capital Partners. Another supplier, Dialog Semiconductor, has seen its stock drop based on rumors that Apple may change how it handles power management chips.
However, according to EE Times' sources, there aren't many rivals out there likely to take away TSMC's Apple business, as neither Samsung or Intel is seen as having much chance to replace them.
TSMC, back in July, trimmed its outlook for the year. While this was attributed at the time to a decline in demand for chips used in cryptocurrency mining, the 2018 iPhone cycle is seen as crucial in helping them recover from a bad quarter.
Comments
I look at it this way loosing a customer is never good! In TSMC case though they have plenty of potential customers. This article has the flavor of an analyst that is off the rails.
IPhone X has failed in many markets. To put it bluntly the cost of the device is just way too high for most people sensibilities.
As for Apples market capitalization you do realize that they make more than just the iPhone right? By the way as used in these discussions a failed device might not have the meaning you suspect. A device fails if it doesn't meet sales expectations, not your expectations. Everything ive seen indicates that iPhone X failed in many markets with perhaps China being the only real success story.
TSMC has other customers.
So to answer your question: anyone with an internet connection can do better than these so-called analysts.
They could invest in the company, but they’re not going to spend 30% over the current market valuation of $213 billion that TSMC currently has.
Yes, we see offers like that from cell companies trying to get contracts. But with Samsung’s phones, these sales come from phone stores as well. We don’t see those huge sales on Apple’s phones other than from these cell companies. That’s a major difference.
"Further, even if TSMC became unreliable partner...." and then provided 3 alternatives. Buying the company was one of them.
I honestly just don't see the concerns described, concerning. (?)
I would call that a definite success.
sigh.
Get out of here!
everything you read about Samsung’s sales are just guesses by analysts, who have no way of verifying their guesses since the real numbers are never released. Estimates for Galaxy sales for the 8 series was between 30-35 million for the year, and estimates for Note 8 sales were between 5-7 million. For the 9 series, the estimates are somewhat lower, particularly since Samsung said that sales for the 9 was “disappointing”. In addition, sales for the Galaxy series reached its peak with the 4. 5 sales were about the same, and has declined each year since then. Apple sold almost 160 million 8, 8+ and X models last year, as a comparison. About a third of those sales were for the X. So sales were not about equal, but about 2-3 times that of the entire S8 series phone sales, and about 7 times that of the Note, going, of course by those guesses as to the sales of Samsung’s products.