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Apple plans to divvy up 14/16nm orders among foundries

Posted: 21 Sep 2015 ?? ?Print Version ?Bookmark and Share

Keywords:Apple? Samsung? TSMC? Globalfoundries? iPhone?

"This is also the first time Apple is adopting multiple foundry suppliers," said Lau. "As TSMC risks idling its 16nm capacity if it doesn't agree to Apple's latest asking price, we believe its 1Q16 sales could again be hurt."

Weaker prices come as slowing smartphone, tablet, PC and TV demand is coupled with foundry customers' excessive optimism and fear of high-season capacity constraints, according to Abrams. Those factors are triggering an extended inventory correction, he said.

The top-10 fabless companies, based on consensus estimates, are averaging out to a modest annual sales decline in 2015 for the first time since the 2008 financial crisis, said Abrams, who expects a rebound in 2016 as inventory clears.

TSMC has trimmed its 16nm capacity plan several times this year, from an original 80,000 wafers/month to a more realistic 50,000 recently, due to its loss of first-source customers such as Qualcomm and Apple to rival Samsung, said Lau. TSMC will probably have to trim more capital expansion in 2015 and 2016, Lau said.

This year, TSMC led the world's chipmakers with the largest capital expansion plan, set within a range of $10.5 billion and $11 billion.

Strong node

Still, 14/16nm will be a much stronger node than 20nm, generating as much as $2.5 billion in foundry sales this year and another $8-$10 billion in 2016, according to Bernstein analyst Li.

Taking advantage of its early lead in the 14nm FinFET race, Samsung is extending its reach and services to more customers and applications, according to Lau. In addition to its two baselines in 2015, 14LPE (early) and 14LPP (Plus), Samsung will introduce three variants in 2016: 14LPC (Compact), 14LPA (Advanced) and 14LPH (High-Performance), Lau said.

Samsung uses 14LPE for its in-house Exynos 7420, which powers Galaxy S6 and Note5 high-end smartphones. The company's 14LPP is for the upcoming Apple A9 and the S820, Qualcomm's next-generation high-end application processor. Samsung's 14LPC is similar to TSMC's 16LCC, which saves costs by having few mask layers. Both are targeted at low-to-mid-end smartphones or consumer electronics.

14LPH is developed for next-generation smartphone/tablet applications such as Exynos M, Apple's A10, and Qualcomm's S8X0 in 2016.

- Alan Patterson
??EE Times

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