A DigiTimes report today re-affirmed that Apple has no plans to use a new third-party foundry for its iPhone chips this year and that TSMC will be the sole manufacturer of the upcoming A13 processor.
According to the report, Apple has no plans to move the production of the A13 chips, which are expected to come with the new iPhones this year, to foundries other than TSMC. DigiTimes cited "sources familiar with the matter" and said that TSMC will enter volume production of the chips using its 7nm process, "including an enhanced version with EUV [extreme ultraviolet lithography]" in Q2.
Apple started making its iPhones at Samsung’s manufacturing facilities initially, but it eventually began switching back and forth between Samsung and TSMC, presumably to lower rival Samsung’s leverage over it. As Samsung has turned into a growing threat to Apple in the smartphone market, Apple has increasingly preferred TSMC for the manufacturing of its iPhone chips.
With Samsung falling behind in the adoption of the 7nm process technology, Apple seems to have selected TSMC as its exclusive supplier for the next few iPhone chip generations. TSMC’s schedule for new process generations also seems to be more aligned with Apple’s iPhone release schedule (in the fall). Meanwhile, Samsung’s move to new process technologies seems to be more aligned with the release of the company’s Galaxy S flagship smartphones (in the spring).
“Slow Year” for TSMC
Despite Apple using TSMC exclusively this year and AMD giving exclusive production rights of its Zen 2 processors to TSMC, the company is expecting a “slow year,” according to the DigiTimes report. Apple itself has registered slower iPhone sales lately due to a decline in China, primarily, but also because of other reasons, such as higher iPhone prices compared to previous generations. Qualcomm, HiSilicon and other customers have also reduced orders from TSMC for the first half of the year, according to a previous report late last year.