TSMC reportedly turns down Apple and Qualcomm's $1 bln bids for exclusive chip foundry capacity

TSMC reportedly turns down Apple and Qualcomm's $1 bln bids for exclusive chip foundry capacity
The chairman of TSMC Morris Chang you see in the thumb, has allegedly declined the grand $1+ bln bids of both Apple and Qualcomm, that wanted exclusive capacity of the chip foundry to be set aside specifically for their own custom chipsets.

TSMC's 28nm process builds the new Snapdragon S4 family of Qualcomm, that is in so many phones these days, but it can't even equip the factories with the high-precision machinery needed fast enough to satisfy demand this year. It recently even broke the 3GHz barrier with a 28nm mobile chip to showcase what the technology is capable of. Apple, on the other hand, has been trying to break away from Samsung as chip supplier, due to the legal spat between the two.

Samsung has reportedly said at the emergency exec meeting after the verdict that the foundry business in Austin, Texas, that makes chips for the iPhone and the iPad, is "firewalled" from the legal drama between the two companies, but you never know. Still, Samsung just last week announced another $4 billion will be poured in the Austin factory, so apparently it doesn't expect Apple to be able to shift chip production any time soon.

Back to TSMC, it is apparently afraid that if it dedicates a factory or two to one single client, it will have a hard time retooling it if a rapid shift in technology appears. We don't know what rapid shift will go against industry stalwarts like Apple and Qualcomm, but you never know what ARM is cooking up its sleeve for the next generation of mobile chipsets, so the Taiwanese are hedging their bets. “You have to be careful. Once that product migrates, what are going to do with that dedicated fab? We would like to keep the flexibility”, said TSMC's Chief Financial Officer Laura Ho.

source: Bloomberg



1. andro.

Posts: 1999; Member since: Sep 16, 2011

They know for certainty that making a deal with apple will not only lose them their flexibility but would make them literally chained by the groin to the floor by domineering Apple. It makes good sense for them in the long run

3. ph00ny

Posts: 2055; Member since: May 26, 2011

Not to mention lowball prices apple demands. There were quite a few reports that Apple tends to ask for prices for higher quantity and ends up ordering at a lower quantity which would have warranted a much higher cost per unit from the supplier

2. B3BLW29

Posts: 238; Member since: Mar 02, 2012

Old dude seems to be very intelligent...

4. ph00ny

Posts: 2055; Member since: May 26, 2011

Morris Chang is a force in foundry business

5. remixfa

Posts: 14605; Member since: Dec 19, 2008

Its an example of Apple's over litigious ass coming back to bite them. Who wants to get in bed with a company that demands that you make next to no profit on your product so they can make double profits.. and then threaten you with lawsuits at every corner for the trouble. Heck no. It shows people are no longer jumping at the opportunity to be part of the Apple supply chain. You cant abuse your suppliers and expect the industry to not notice.

6. mafiaprinc3

Posts: 585; Member since: May 07, 2012

i agree with you %100

11. gallitoking

Posts: 4721; Member since: May 17, 2011

a lawsuit that they won.. and it show that it was Samsung that did wrong. so what again??

13. remixfa

Posts: 14605; Member since: Dec 19, 2008

yea, thats one lawsuit out of dozens they have filed. They dont have a great winning record actually, but they win enough and throw enough lawyers on the field to keep others nervous. And besides, This "win" will be over turned on appeal at least partially if not fully. Be careful what you wish for because if any of samsung's patents are found to be infringed upon by the iphone, your looking at a US ban of iphones unless Apple comes to reasonable terms.... which we all know is unlikely.

7. sithvenger

Posts: 371; Member since: Aug 25, 2012

Why is no one talkin about Qualcomm n these posts? Aren't they involved too?

8. remixfa

Posts: 14605; Member since: Dec 19, 2008

because they dont have a reputation of bullying, patent trolling, we can copy but you cant mentality, ect.

9. ph00ny

Posts: 2055; Member since: May 26, 2011

I think qualcomm was reportedly signing with Samsung on top of their existing relationship with TSMC to meet demands. I guess that means samsung supplies their own qualcomm SoCs and possibly replace apple for the capacity

10. remixfa

Posts: 14605; Member since: Dec 19, 2008

they cant. Qualcomm uses 28nm wafers, Samsung uses 32nm wafers and a completely separate high gate tech to make them. If Q was in talks with samsung to increase production, then they were probably looking for something similar.. a dedicated factory just for qualcomm.

14. ph00ny

Posts: 2055; Member since: May 26, 2011

http://news.cens.com/cens/html/en/news/news_inner_ 40603.html Let me know when you're done reading ;) BTW 32nm HKMG is a more advanced manufacturing method than 28nm polysi which is being used to build the snapdragons

12. jmoita2

Posts: 930; Member since: Dec 23, 2011

It's good to see at least some companies not bending over backwards to become Apple's slave.

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