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Apple shifts more A9 processor orders to TSMC

Posted: 24 Mar 2015 ?? ?Print Version ?Bookmark and Share

Keywords:A9? 16nm? 14nm? iPhone 6S?

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest chip foundry, seems to have gained more orders for Apple's A9 processors, once again outdoing Samsung, which is having yield problems with its most advanced technology node, according to sources interviewed by EE Times.

Apple is ramping production of the A9 this year for the iPhone 6S, according to the sources. Apple, the world's biggest company by market capitalisation, originally handed Samsung about 80 per cent of the A9 orders and the rest to TSMC, the sources say. Now the tables appear to have turned.

"We believe TSMC will get 40 per cent of the next iPhone processors, in addition to all the next iPad processors," said Mark Li, senior analyst with Bernstein, in a March 20 report. TSMC will get about 70 per cent of Apple's overall business starting in the third quarter of 2015, the report stated.

TSMC's revenue contribution from 16nm will begin with 3 per cent in the third quarter of this year, earlier than the company's guidance, and jump to 12 per cent in the fourth quarter, according to Li.

TSMC director of corporate communications Elizabeth Sun declined to comment.

Industry insiders matched Li's views. TSMC will get the majority share of the A9, said a supplier in the semiconductor equipment industry in Taiwan who requested anonymity.

According to my colleagues in South Korea, TSMC will take two-thirds and perhaps more of the A9 orders from Apple. It looks like TSMC's 16nm yield is better than Samsung's 14nm yield.

Neck and neck

TSMC and Samsung have been in a neck-and-neck race to commercialise foundry production of FinFET chips for customers such as Apple and Qualcomm. The two companies lag Intel, which is making the world's first 3D chips for internal use. In the middle of last year, Samsung appeared to have gained an advantage with its 14nm FinFET process over TSMC's 16nm technology.

Apple should be able to walk the tightrope between the two process technologies for one product, according to Bernstein's Li.

"This will be the first time that Apple has split the foundry service of the same processor at two suppliers," said Li. "We think Apple now has a very strong design team to make the variance of the chips at two foundries small enough so that regular end users can't tell. The fact that Samsung has been repeatedly adopting different chips in the same handset model also proves this feasible."

The next question for TSMC will be how to fulfil the Apple order, according to the Taiwan industry source.

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