Apple May Shift CPU Manufacturing From Samsung to TSMC

By Wolfgang Gruener
published

Apple may be leveraging its market power to shift production contracts away from Samsung to a greater extent than currently believed.

A new rumor in Taiwan suggests that Apple could be turning to TSMC as the main manufacturer and supplier for its ARM-based processors.

Following the conclusion of a legal battle that had Apple walk away with more than $1 billion in damages paid by Samsung, a production switch may be the far greater financial blow, given current estimates from IHS that Apple will be selling 149 million iPhones and close to 60 million iPads this year. According to Digitimes, it appears that if TSMC can prove it has what it takes to produce Apple's chips, it may be able to grab the lion's share of the business.

It is unlikely, however, that Apple will be making the same mistake again and rely on a single source for one of the key components of its devices. Just like the company diversified its memory supplier base, it would not be surprising if the company did the same with its processor. It is not a secret that Globalfoundries has been courting Apple for some time now to get into play as well. Digitimes noted that if TSMC is in fact in talks with Apple, the company's 16nm FinFET process to be Apple's most likely choice.

At this time, Samsung remains the sole production company of the iPhone and iPad processors.

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Wolfgang Gruener
45 Comments Comment from the forums
  • dalethepcman
    This is media spin on trying to make it look like something Apple chose to do. When in fact, the contract Apple had with Samsung is about to expire, and Samsung has given Apple the middle finger.

    In related news : TSMC denied Apple a contact that would allow them exclusive use of the full production capacity of their fab's. Because of this Apple is now stuck between a rock and a hard place as they pissed off Samsung, and TSMC cannot meet their demands without turning away other customers, which they are unwilling to do at this time.

    http://www.bloomberg.com/news/2012-08-29/apple-qualcomm-spurned-in-bids-for-exclusive-tsmc-chip-supply.html
    Reply
  • leeashton
    Um "TSMC denied Apple a contact that would allow them exclusive use of the full production capacity of their fab's" why the fuck would apple want this, TSMC are very very busy and apple a a small pool of the TOTAl production of ARMS processors, of vourse they said "FUCK OFF APPLE" why would they dedicate 100% to apple and nothing to qualcomm and TI (qualcomm chip is better than a6 anyway).
    Apple really could be in trouble global foundrys wont touch the ARM race right now, they have issues at 28nm and below, TMSc also makes x86 pricessors at tye same FAB.
    Reply
  • egilbe
    TSMC didn't even have enough capacity to make nVidia's chips for the GTX 680. Who does Apple think they are, any way? Hope that 1 billion dollar settlement was worth it
    Reply
  • A Bad Day
    Apple! You should open your own plants if you're so happy with angering your supplier and not being able to find a replacement!
    Reply
  • bllue
    Burn Apple burn
    Reply
  • rantoc
    With both Nvidias and AMD's trouble to get sufficient quantity's i will laugh if apple are so stupid. With the iSheep heard i'm sure there will be news of people dying in the lines waiting for a phone there are no chips for, its a sad breed!
    Reply
  • stuartl
    Just look at the author of the article here, if it's not "Pro Apple" he didn't write it.
    Reply
  • I would consider if Samsung decided to stop selling anything to Apple.

    selling 149 million iPhones and close to 60 million iPads
    A pcmag article I can link to claims Apple generates $650 in revenue per iPhone. That means a month's delay in production costs a little over 8 billion dollars. And this doesn't include revenue from the iPad.

    That's a lot more than a mere billion.

    Not to mention if there is a decrease in quality or a decrease in supply due to sourcing problems, which might even tarnish the brand.

    I don't know how Apple always acts like an arrogant litigious cry baby and people think the brand represents cool laid back people.
    Reply
  • spectrewind
    A Bad DayApple! You should open your own plants if you're so happy with angering your supplier and not being able to find a replacement!
    Apple definitely should open their own plants. Open them in the USA. Create some American jobs.

    Will they? I doubt it.... ;o)
    Reply
  • thorkle
    spectrewindApple definitely should open their own plants. Open them in the USA. Create some American jobs.Will they? I doubt it.... ;o)If they did that it might even begin to make sense why their products cost ludicrously more than other comparable products. Their profit margins would more than allow this, and their cash reserves would too. I would actually maybe start to respect Apple if they did this, but I would still never buy one of their products.
    Reply