TSMC May Win Bulk of A9 Orders Due to Better Production Yield

News reports and rumors have gone back and forth multiple times over whether Samsung or the Taiwan Semiconductor Manufacturing Company (TSMC) will produce the A9 chips designed for use in next-generation iOS devices as the two companies compete for Apple's business.

In December, a report suggested Samsung had already begun production on the A9 chips, but a new analyst prediction shared by the Taipei Times suggests that TSMC, not Samsung, may be Apple's main A9 chip supplier due to its more favorable production yield.

tsmc_samsung_logo

"The two companies' technological capabilities are similar, so the key factor will be whose mass-production yield is better," MIC director Chris Hung (洪春暉) told reporters on the sidelines of the event. Hung added that the chances of TSMC remaining the main supplier are higher because of its better yields.

While one company will win the right to produce the bulk of Apple's next-generation chips, Apple may spread orders of the A9 processor across multiple suppliers in order to cut down on risk. The best yield results in the lowest price for Apple, so the company that manages to produce the most usable chips from a single wafer (a semiconductor material) will likely win the bulk of orders from Apple.

The continually shifting Samsung vs. TSMC rumors reflect the ongoing competition between the two chip manufacturing companies and demonstrate just how important Apple contracts are to suppliers. As we saw with GT Advanced and its failed sapphire deal with the Cupertino company, manufacturers will go to great lengths to secure lucrative partnerships with Apple.

In 2013, Apple signed a multi-year deal with TSMC to produce A-series processors for Apple devices as the company made an effort to move away from Samsung, but while TSMC produced the bulk of Apple's A8 and A8X chips for the iPhone 6 and the iPad Air 2, Apple has not been able to entirely cut ties with Samsung due to its chip production expertise and reliability.

As chip technology advances, it becomes more and more difficult for companies like Samsung, TSMC, Intel, and others to pack transistors onto an ever-decreasing surface area, which is why Apple has likely made moves to diversify its supply chain lineup in recent years. More suppliers gives the company a backup solution should one run into production difficulties that could result in potential delays.

Top Rated Comments

Aluminum213 Avatar
80 months ago
Sounds like a good strategy to me. It also likely gets them to compete on price as well.

Don't worry, the savings won't be passed upon to you
Score: 11 Votes (Like | Disagree)
Keniutek Avatar
80 months ago
I would rather see Samsung as the main supplier. We all say "bad things" about the Korean company, bla bla bla...
and then pray to get their screen or hd. LOL
Score: 8 Votes (Like | Disagree)
Noble Actual Avatar
80 months ago
Hope this isn't true.

TSMC has had a BAD history of delivering.

Wasn't A8 suppose to be bulk TSMC? They failed and Samsung had to take over.

Apple has wanted to stop using Samsung to make its parts but the truth is...they make the BETTER parts

Samsung > TSMC over chips.
Samsung > LG over displays.
Score: 7 Votes (Like | Disagree)
mschmalenbach Avatar
80 months ago
I don't think I follow... Why would these companies need different tape-outs and if that is the case, why couldn't Apple supply multiple tape-outs for the manufactures? Could you explain a little?

Different tape-outs will likely be needed for several reasons, even though Apple might be using 14nm (for example) processes from both TSMC and Samsung. "Why?", you might ask...

Samsung and TSMC are unlikely to have identical processes, even if they do use the same equipment in their fabs. Why different processes? Because they were developed differently - unless they licensed the process in its entirety from a 3rd party...

Manufacturing a complex semiconductor involves a lot of steps, some of which require the use of pretty nasty chemicals to etch away other chemicals, thus forming various patterns and structures on the silicon wafer on to which metals like aluminum or copper are deposited (to form signal pathways) or to which dopants are added to form the N type and P type junctions that make up transistors.

The complex computer aided design systems used by Apple and other designers need to know about the characteristics of the target manufacturing process in order to make sure that dopant areas are big enough to enable the transistors to work as intended, that signal pathways aren't too close together that they might short out in manufacturing, or become too narrow and so perhaps affect system timings in a variety of subtle ways. Remember there are upwards of 1-2 BILLION transistors on each of these devices... they pretty much ALL need to work as expected...

So different manufacturing processes equates to different design rules - if you are going to manufacture on 2 different processes, even if they are very similar, you are going to need to simulate your system against each set of design rules, and do your chip layout according to the different process/engineering/layout rules of each - and layout and simulation represent the majority of design time... So you don't go for 2 suppliers with these complex parts for the hell of it - it's a critical decision to make... requires a lot of engineering resources...

But if you're going to be selling 40-80 million devices a quarter, and it's core to your business reputation and model, then you'd be almost negligent to put all your 'eggs in one basket', so to speak... or at least, all in one fab, even if it's only with one supplier...

Creating the mask sets needed for TSMC and Samsung (because they won't be the same) for the 10-14nm process node is likely to cost $10s MILLION per set, and my $10s MILLION we're talking closer to $80M than $30M! If not more...

In summary, it's very unlikely that 2 fab processes developed by 2 different companies, even if they worked together closely, will be sufficiently similar for only 1 tape out to be needed AND still get the maximum density and performance out of the manufactured chips...

... and the cost of each tape out and mask set for each supplier at these process nodes/geometries is VERY HIGH!! So you'd think twice, and then twice again, before going down the road of multiple supplier...

UNLESS it's so critical to your business that you can't afford the risk of poor yields / capacity & supply constraints from your supply chain.

For the procurement/supply chain side of this topic, investigate the financial risk vs supply chain risk 'grid' put forward by Kraljic (it's the basis of supply chain management studies these days, I believe). Google 'kraljic purchasing model'.

----------

Not worth it? Well over 100M chips at near $40 a pop makes 20% a roughly $1B business. There are companies that spend as much on tape-outs for lesser business opportunities.

Tape-outs & mask sets at the 10-14nm process nodes can cost 'in the region of $100M'...

So development by trial and error is out! Hence a LOT of simulation work... and that TAKES TIME and some serious computing power!

Also, just because we're talking Apple, TSMC & Samsung here - about the biggest buyer/suppliers of chips on the planet, doesn't mean that any of them will 'play nice and easy' when it comes to apportioning risk!
Score: 6 Votes (Like | Disagree)
Morris Avatar
80 months ago
All these analysts claiming the production run is split between two companies… I have yet to see the first person with actual chip production experience state that it’s even possible.

So far I only see experts claiming that it’s technically almost impossible to split advanced production runs because different companies have different requirements. You can’t send the same tape-out to both companies because tape-outs for TSMC wouldn’t be compatible with Samsung’s equipment and vice-versa.

Instead of printing speculation from “analysts” could MacRumors instead try to speak to a subject expert to get real insight? You know, someone who actually knows a thing or two about chip design and production?
Score: 6 Votes (Like | Disagree)
chrmjenkins Avatar
80 months ago
The last official reports had TSMC's FinFET schedule well behind Samsung. I doubt much has drastically changed in the last few months.

Their processes are also not compatible, so it's not simply flipping a switch to decide between the two.
Score: 5 Votes (Like | Disagree)

Top Stories

jon prosser imac 2021colors

Prosser: 2021 iMac to Come in Five Colors, Apple Silicon Mac Pro to Resemble 'Stacked' Mac Minis

Wednesday February 24, 2021 7:26 am PST by
Hit-and-miss leaker Jon Prosser has today alleged that the upcoming 2021 iMac models will offer five color options, mirroring the colors of the fourth-generation iPad Air, and revealed a number of additional details about the Mac Pro with Apple Silicon. In a new video on YouTube channel FrontPageTech, Prosser explained that the redesigned iMacs will come featuring options for Silver, Space ...
First Look Big Sur Feature2

Apple Releases macOS Big Sur 11.2.2 to Prevent MacBooks From Being Damaged by Third-Party Non-Compliant Docks

Thursday February 25, 2021 10:07 am PST by
Apple today released macOS Big Sur 11.2.2, the fourth update to the macOS Big Sur operating system that launched in November. macOS Big Sur 11.2.2 comes two weeks after the release of macOS Big Sur 11.2.1, a bug fix update. The new ‌‌‌‌macOS Big Sur‌‌‌ 11.2.2‌ update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences....
microsoft edge ios android

Bill Gates Says His Preference for Android Over iPhone is Due to Pre-Installed Software

Friday February 26, 2021 3:35 am PST by
Microsoft co-founder Bill Gates this week participated in his first meeting on Clubhouse, the increasingly popular invite-only conversation app, where he fielded a range of questions as part of an ongoing book tour. Gates was interviewed by journalist Andrew Ross Sorkin, and given that the Clubhouse app is currently only available on iOS, naturally one of the questions that came up was...
flat mbp 14 inch feature yellow

Redesigned 14-Inch MacBook Pro Expected to Feature Brighter Mini-LED Display With Slimmer Bezels and More

Thursday February 25, 2021 7:48 am PST by
Apple plans to unveil new 14-inch and 16-inch MacBook Pro models with Mini-LED-backlit displays in the second half of this year, according to industry sources cited by Taiwanese supply chain publication DigiTimes. The report claims that Radiant Opto-Electronics will be the exclusive supplier of the Mini-LED backlight units, while Quanta Computer is said to be tasked with final assembly of the...
m1 mac mini

M1 Mac Users Report Excessive SSD Wear

Tuesday February 23, 2021 7:07 am PST by
Over the past week, some M1 Mac users have been reporting alarming SSD health readings, suggesting that these devices are writing extraordinary amounts of data to their drives (via iMore). Across Twitter and the MacRumors forums, users are reporting that M1 Macs are experiencing extremely high drive writes over a short space of time. In what appear to be the most severe cases, M1 Macs are sai...
steam apple logo

Valve Ordered to Give Apple Information on 436 Steam Games As Part of Epic Games Legal Case

Thursday February 25, 2021 1:50 am PST by
Valve, the makers behind popular game distribution platform Steam, will be forced to hand over aggregate historical sales, price, and other information on 436 games hosted on the store to Apple, as part of the Apple vs. Epic Games antitrust case. As reported in a paywalled report by Law360, during a virtual discovery hearing on Wednesday, U.S. Magistrate Judge Thomas S. Hixson ordered that...
2021 mbp sd slot feature2

Kuo: New MacBook Pro Models With HDMI Port and SD Card Reader to Launch Later This Year

Monday February 22, 2021 8:52 pm PST by
Apple plans to release two new MacBook Pro models equipped with an HDMI port and SD card reader in the second half of 2021, according to analyst Ming-Chi Kuo, who outlined his expectations in a research note obtained by MacRumors. The return of an SD card reader was first reported by Bloomberg's Mark Gurman last month. "We predict that Apple's two new MacBook Pro models in 2H21 will have...
apple store macarthur center

Apple Store at MacArthur Center in Virginia Permanently Closing Following Years of Safety Issues at Shopping Mall

Thursday February 25, 2021 4:45 pm PST by
Apple today indicated that its retail store at the MacArthur Center shopping mall in Norfolk, Virginia will be permanently closing after over 14 years of business, although an exact closure date has yet to be announced by the company. Apple has assured that it will be offering all employees at the store other positions within Apple, and said that it looks forward to continuing to serve...
qualcomm snapdragon x60 5g

iPhone 13 Lineup Expected to Use Qualcomm's Snapdragon X60 Modem With Several 5G Improvements

Wednesday February 24, 2021 8:10 am PST by
Apple's next-generation iPhone 13 lineup will use Qualcomm's Snapdragon X60 5G modem, with Samsung to handle manufacturing of the chip, according to DigiTimes. Built on a 5nm process, the X60 packs higher power efficiency into a smaller footprint compared to the 7nm-based Snapdragon X55 modem used in iPhone 12 models, which could contribute to longer battery life. With the X60 modem, iPhone...
anker magsafe powercore battery pack

Anker Releases MagSafe-Compatible Battery Pack for iPhone 12 Lineup

Tuesday February 23, 2021 7:49 am PST by
Following rumors that Apple is working on a MagSafe battery pack for iPhone 12 models, popular accessory maker Anker has beaten Apple to the punch with the release of its PowerCore Magnetic 5K Wireless Power Bank. First previewed at CES 2021, the PowerCore battery pack magnetically attaches to the back of any iPhone 12 model and provides 5W of wireless charging. With a 5,000 mAh capacity,...