Samsung loses Apple chip-making share to TSMC, gains Qualcomm as 14nm/16nm chip customer?

posted by Luis D. / Mar 20, 2015, 9:13 AM

Samsung loses Apple chip-making share to TSMC, gains Qualcomm as 14nm/16nm chip customer?

Bernstein analyst Mark Li released a note containing some interesting predictions about Samsung's semiconductor business in relation to Apple and Qualcomm's supply interests. If his theses spell any truth, then the near future could see Samsung Semiconductor lose a share of its A9 processor production duties to rival TSMC, while simultaneously gaining a new customer by the name of Qualcomm.

According to Mr. Li, Samsung was to be the sole supplier of next-generation A9 processors (probably 14nm) for this year's iPhone, with TSMC handling silicon for the next iPad (A9X, 16nm) and "low-end iPhone" (whatever that means). Alas, the analyst suggests that Samsung has experienced some yield difficulties with its 14nm chips. It isn't mentioned whether they are Apple chips or Exynos chips for Galaxy devices, though we bet on the former, simply because they were designed by a third party.

This, and the need for supply diversification (in order to reduce investment risk) prompted Apple to hand over nearly 40% of its A9 orders to TSMC. Thus, Samsung Semiconductor retains its position as main silicon supplier for Apple, while TSMC's share in Apple processor supply goes up to 70% (from 50%).

A new customer by the name of Qualcomm

Although losing business is bad for Samsung, the Koreans' expertise in chip-making got a strong showcase this year, with its industry-first 14nm mobile AP production process and strong-performing Exynos 7420 SoC generating lauding headlines. This may have gotten the attention of Qualcomm in a way one may not expect.

According to Mr. Li, the US chip mogul is looking to transition to 14 & 16nm production quicker than planned, which could spell trouble for TSMC, while rendering Samsung a primary supplier of 14nm Snapdragon chips in late 2015 or early 2016. It is said that Qualcomm's 20nm orders constitute up to 50% of TSMC's demand for 20nm production in 2015, which will weaken the Taiwanese supplier's revenue in this direction, but TSMC could make up for it with the increase in 16nm orders.

Bear in mind that all of this is analyst predictions, not bulletproof information. We have no way to establish its credibility with absolute certainty. We have contacted Qualcomm for commentary and we'll publish a statement if there's one.

UPDATE (March 20, 2015 13:38 CDT): Qualcomm politely declined to comment on the report.

source: Barron's Asia via G For Games

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21 Comments

1. arch_angel

Posts: 1651; Member since: Feb 20, 2015

with its industry-first 16nm mobile AP production process. dont you mean 14nm?

posted on Mar 20, 2015, 9:19 AM 1

11. rd_nest

Posts: 1656; Member since: Jun 06, 2010

Samsung's logic density is much better than TSMC. TSMC 16nm = 90nm*64nm = 5760 nm^2 Samsung 14nm = 78nm*64nm = 4992 nm^2 TSMC's 16nm is almost same as 20nm. TSMC's both BEOL and FEOL are 20nm. Also not to forget, towards end of this year Samsung/GF will probably be using LPP instead of LPE used now, which is more efficient.

posted on Mar 20, 2015, 12:53 PM 11

13. arch_angel

Posts: 1651; Member since: Feb 20, 2015

yes i know all of that already why u telling me this?

posted on Mar 20, 2015, 3:20 PM 0

17. rd_nest

Posts: 1656; Member since: Jun 06, 2010

I am not telling you, I don't have time to teach anybody. I am hijacking the thread. Is that not clear enough??

posted on Mar 20, 2015, 5:08 PM 4

20. arch_angel

Posts: 1651; Member since: Feb 20, 2015

ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok ok

posted on Mar 21, 2015, 12:35 AM 0

12. medicci37

Posts: 1361; Member since: Nov 19, 2011

From reading this article, I'm I guessing PA is still looking for help?

posted on Mar 20, 2015, 1:55 PM 1

18. engineer-1701d unregistered

this is nothing but good news if it is going to be true, apples a9 will fail hard core just like tsmc other chips and they are still to new into the 14nm field so they may fail hardcore. but samsungs next year unit will be smaller than 14nm from this year and picking up QC will make up for all and increase their name and then apple comes crying back again like last time and samsung says no and apple goes bottom up

posted on Mar 20, 2015, 5:33 PM 1

2. guest

Posts: 371; Member since: Jun 13, 2012

Does it really matter it really matter that PA screwed it up though? Fauxteen or 16 nm Samsung and TSM's process nodes are more like 20nm with fins.

posted on Mar 20, 2015, 9:25 AM 1

3. TyrionLannister unregistered

14 and 16 nm has been exchanged too many times in this article. Don't you guys proof-read?

posted on Mar 20, 2015, 9:52 AM 4

4. luis.d

Posts: 354; Member since: Dec 04, 2013

Sorry, my 14nm brain mixed up the numbers :)

posted on Mar 20, 2015, 10:03 AM 1

5. Iodine

Posts: 1478; Member since: Jun 19, 2014

It makes sense. As Apple moved their entire next gen chips (A8/A8X) production to TSMC 20nm they left qualcomm and others with a huge 20nm delay and when they finally got their hands on 20nm it looks like they use wafers Apple is rejecting - supposed 20nm snapdragon overheating issue. And now as Apple probably isn't planning to leave a single 16nm wafer to the others so qualcomm was forced to samsung to remain competitive. On the other hand the 16nm process will bring some serious battery life improvements to the next generation iPhone.

posted on Mar 20, 2015, 10:05 AM 0

9. shm224

Posts: 283; Member since: Mar 19, 2015

@iodine : what delay or "wafer shortage" are you talking about? Samsung apparently skipped the 20nm processing (used only internally) to get ahead of TSMC in 14nm processing. Samsung's 14nm is from what I hear about a full year ahead of TSMC's 16nm. In any case, it's highly unlike that Apple is going to split their next A9 production between TSMC's 16nm and Samsung's 14nm.

posted on Mar 20, 2015, 12:08 PM 4

21. Trex95

Posts: 2380; Member since: Mar 03, 2013

80% TSMC 20% Samsung .

posted on Mar 22, 2015, 5:50 PM 0

6. GeorgeDao123

Posts: 432; Member since: Aug 20, 2013

This year must be a good one for Sammy. Don't over-launch too many models, JKS.

posted on Mar 20, 2015, 10:26 AM 2

7. grahaman27

Posts: 364; Member since: Apr 05, 2013

This is pure speculation and really doesnt make sense since 16nm finfet wont be available until Q4 2015 at the earliest according to reports. Also, some reports has mentioned quite the opposite: http://www.extremetech.com/computing/198822-samsung-expected-to-manufacture-14nm-chips-for-qualcomm-apple-possibly-nvidia-in-2015

posted on Mar 20, 2015, 11:11 AM 1

8. shm224

Posts: 283; Member since: Mar 19, 2015

I think this guy is wrong. What he probably meant to say is up to 40% of all Apple APs, the A8 and A9, will be produced by TSMC -- meaning TSMC will continue to make the older A8 and Samsung the A9, or 60%.

posted on Mar 20, 2015, 11:24 AM 2

16. AppleCultist

Posts: 335; Member since: Feb 18, 2015

The analyst said: "This, and the need for supply diversification (in order to reduce investment risk) prompted Apple to hand over nearly 40% of its A9 orders to TSMC" Yes, I know it's hard to believe that an analyst who specializes in this industry doesn't know the basics of fabricating APs. I think we can safely say this analyst is full of crap.

posted on Mar 20, 2015, 4:54 PM 0

19. cheetah2k

Posts: 2211; Member since: Jan 16, 2011

With Apple you only get cheap. TSMC sell cheap chips based on cheap tech

posted on Mar 20, 2015, 6:17 PM 0

10. CreeDiddy

Posts: 2144; Member since: Nov 04, 2011

My guess is that Apple will go with the A9 14nm, while their A9X will go 16nm. All speculation, but it makes sense as the article pointed out. Personally, I get 3-4 days out of my iPad Air 2. If this is the case, the iPad Air 3 may go 5mm thin, with similar battery savings on 16nm chipset. Better yet, possibly 30-40% increase in battery life along with shaving the weight as well.

posted on Mar 20, 2015, 12:36 PM 1

14. seven7dust unregistered

I'm thinking iPad pro this year , but we'll have to wait and see. eitherway The new iPad lineup is messy as hell , hope they clean up before the iPad pro , they have like 30 different models to choose from , which is confusing as heck. every new iPad should come with a A9 standard and should have 3G modem/Apple sim built in, this will greatly reduce the number of models. also stop gimping the iPad mini Apple!!! for gods sake it's a better form factor for travel.

posted on Mar 20, 2015, 4:23 PM 0

15. AppleCultist

Posts: 335; Member since: Feb 18, 2015

Again, "analysts" who have no technical background making moronic predictions. You can't just take one design from one fab and then transfer them to another fab and expect them to come out the same. Hell, that design that you made for one fab will most likely be incompatible for another company's fab. Either TSMC gets all the A9 orders or Samsung gets all the A9 orders. There is no middle ground.