Looks like Apple's switch from Samsung to TSMC is a done deal
Apple CPU orders raise concerns over TSMC production capacity
Cage Chao, Taipei; Jessie Shen, DIGITIMES [Wednesday 28 November 2012] | The semiconductor industry is now more concerned about how Taiwan Semiconductor Manufacture Company (TSMC) is going to distribute its production capacity, and what proportion of revenues and profits it can generate if it receives CPU orders from Apple in 2013.
It appears more likely that TSMC will start producing chips for Apple's next iOS devices in 2013, according to industry observers. Samsung Electronics has been the sole supplier of CPUs that power the existing iPhones and iPads.
Demand from Apple is expected to be huge, said the observers, adding that allocation of TSMC's available advanced process capacity among its major clients will be a critical decision to be made by the foundry.
TSMC's advanced process offerings serve the world's major fabless IC firms including Altera, Qualcomm and Nvidia. While being capable of providing sufficient capacity to Apple, TSMC also does not want to upset its existing major clients, the observers noted. Allocating efficiently its production capacity will be a focus for the foundry in 2013, the observers believe.
Apple's iPhone and iPad devices collectively demand almost 200 million CPUs every year, the observers estimate. TSMC will need at least more than 200,000 12-inch wafers ready to satisfy the huge demand from Apple, the observers said.
In addition, market observers are paying close attention to how significant Apple's orders will contribute to TSMC's revenues and profitability in 2013.
TSMC chairman and CEO Morris Chang previously hinted that it makes complete sense to dedicate a whole fab, or two whole fabs, to just one customer in order to supply enough chips for their high-volume products.
TSMC recently broke ground for the sixth-phase construction of its Fab 14, a 12-inch wafer plant located in southern Taiwan. The new facility will become TSMC's first fab to mass produce 20nm SoCs, and 16nm FinFET chips, the foundry revealed.
According to IC Insights, Samsung's IC foundry sales are forecast to rise 54% in 2012 after a 82% jump in 2011. Apple's orders have been the driving force behind Samsung's foundry business, said the research firm.
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