Apple's processors could be exclusively manufactured by TSMC until 2020

Apple's processors could be exclusively manufactured by TSMC until 2020
Since 2014, TSMC has been under contract by Apple to manufacture its processors and, while it shared this task with Samsung in 2015, the company has been Apple’s exclusive chip supplier since 2016, with this year being no different – TSMC is reportedly dedicating up to 80% of its 7nm production capacity to the new A12 chip. And now, according to one analyst, it looks as though this situation could continue into 2020.

The reason behind this is pretty simple. TSMC is quite far ahead of its competition when it comes to producing chips on the 7-nanometer processor and, while Samsung could theoretically steal some of TSMC’s business from Apple due to its own advances, it seems extremely unlikely at this point in time. After all, the Silicon Valley-based giant already depends heavily on Samsung when it comes to the supply of NAND and DRAM memory chips, mobile camera sensors, and the OLED displays that are used on the iPhone X series. Thus, it’s in Apple’s best interest to diversify its supply chain in order to avoid any situation that would give Samsung, or any other company, sufficient power to drive up its prices, forcing Apple to lower its profit margins.

While on the topic of diversifying its supply chain, the iPhone giant is also reportedly keen on the idea of giving LG a big chunk of its OLED panel orders, which would once again allow it to reduce its reliance on Samsung. However, with the company reportedly having some production problems, it will reportedly only supply a small portion of OLED panels for the larger iPhone X Plus. Elsewhere, though, LG will be in charge of supplying a larger number of LCD panels for the budget iPhone model.

source: EETimes

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9 Comments

1. sherman0422

Posts: 11; Member since: Apr 03, 2015

Wait....... iphone x is like 50% Samsung products. Hmmmmm..........

6. Atechguy0

Posts: 918; Member since: Aug 03, 2018

I don't believe for one minute that 80% of TSMCs capacity will be taken up by Apples new A12. They have a much larger capacity than Apples new A12 SoC.

7. Ninetysix

Posts: 2966; Member since: Oct 08, 2012

As usual, you don't understand what the article is saying.

8. mootu

Posts: 1541; Member since: Mar 16, 2017

"Wait....... iphone x is like 50% Samsung products. Hmmmmm.........." Nope!, just the screen, as the article states.

2. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

The main reason Apple uses TSMC is yes they do give very good quality, the focus is cost. TSMC yet jumped out ahead with 7NM, but Samsung actually has the higher quality process. Which also means, it's more expensive. Apple just needs enough to get by and make sure they don't have problems. TSMC provides that. When Apple wants true quality in something, they use Samsung. Without Samsung, the X wouldn't have had the best display any iPhone has ever had. Especially since the iPhone hasn't has the best display, since S4. Samsung is not worried, Apple always comes back for something. Even if they don't, Samsung has gained more than enough business to circumvent loses due to Apple. After all, Apple ordered so many X panels, and then cut orders only months later and Samsung got stuck with a ton of unused parts. Did bring down their profits by much at all.

3. Dr.Phil

Posts: 2512; Member since: Feb 14, 2011

But even Qualcomm uses TSMC for their 7nm chipsets. The reason QC and Apple chose TSMC is because they have 7nm right now, but Samsung won’t have the 7nm up and running for mass production until next year. The S10 won’t have the 7nm Exynos chipset either. Reports point to the 8nm LPP being the process used.

4. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

I agree. But Apple is an opportunistic company. They usually don't jump on new concepts right away, because they cost more at first. In order for Apple ot maintain high profit, they have to spend the least amount of money. Apple lets other OEM's spend all the money while stuff is expensive, and then wait for the volume of purchase, to bring the cost down. The only reason Apple is using LED displays, is because they are cheaper than LCD's, depending on who you are buying them from. Samsung's was expensive, but it was also the best quality panel. This is why Apple is helping LG with LED production costs. Because LG can give a cheaper high quality panel that is "good enough" for Apple, and less expensive than Samsung. QC like Apple is all about profit. After the 810 fallout, I think the only reason QC asked Samsung to make the 820, was because they lost money when Samsung used its own SoC in the S6, and QC didn't want to lose Samsung as a partner. If Samsung could produce components with better technology, and offer it at the same price as TSMC, both Apple and QC would wait or jump on the opportunity to get it.

5. Dr.Phil

Posts: 2512; Member since: Feb 14, 2011

Well EUV is supposed to cost less than the regular 7nm process, so I really and truly think in this case it’s because TSMC was first to offer the 7nm mass production. Samsung won’t have EUV chipsets until the first half of 2019. In the meantime they’re producing either 8nm chipsets or if they do have 7nm ready for the S10 it will be using a non-EUV process.

9. mootu

Posts: 1541; Member since: Mar 16, 2017

"Samsung won’t have EUV chipsets until the first half of 2019. In the meantime they’re producing either 8nm chipsets or if they do have 7nm ready for the S10 it will be using a non-EUV process." Samsung's 7nm EUV came online in July, at the moment yields are low as with all new processes. They expect to be at full capacity by December so the S10 will be full blown 7nm EUV.

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