TSMC May Supply 30% of A9 Chip Orders for Next-Generation iPhone

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Earlier this month, a report indicated that Samsung would produce the A9 chip for the next-generation iPhone. Now, KGI Securities analyst Ming-Chi Kuo, a reliable source on Apple's future plans, says that he expects Taiwan Semiconductor Manufacturing Company (TSMC) to supply 30% of the chip orders for the next-generation iPhone. This is the latest turn in what has become a back-and-forth affair in determining the companies that will supply A9 chips for next-generation iPhones.

tsmc

We believe key reasons in Apple’s (US) last minute decision to recruit TSMC are: (1) unstable yield rate at GlobalFoundries (US); (2) TSMC’s 16nm FinFET Turbo has exceeded Apple’s expectations in yield rate and performance; and (3) concerns of insufficient 14nm supply from Samsung LSI (KR) due to better-than-expected market feedback of Galaxy S6 and S6 Edge, which uses the in-house 14nm FinFET-manufactured application processor Exynos 7420.

Kuo notes that GlobalFoundries, Samsung's manufacturing partner, has thus far had an unstable yield rate of 30% for the A9 chip, which is below the 50% yield rate that is required for mass production. Bringing TSMC into the chip-supplying fold calms some of the uncertainties of Apple. Additionally, TSMC's 16-nanometer process has exceeded Apple's expectations.

Alternatively, the Cupertino company is worried that the success of the the Samsung Galaxy S6 and S6 Edge, which use Samsung's advanced 14-nanometer process for their chips, will mean that Apple won't be able to book enough chips from Samsung for the next-generation iPhone. Thus, Apple is turning toward TSMC to complement the supplies from both Samsung and GlobalFoundries.

However, over the past couple of months there has been confusion and conflicting reports over the production of the A9 chip in Apple's next-generation devices. In December, a report indicated that Samsung had begun producing A9 chips. In the same month, another report indicated TSMC would be the main supplier for A9 chips in the next iPhone. Then, in January, Kuo expected TSMC to only provide A9X chips for the next-generation iPad. Finally, earlier this month, another report indicated that Samsung and partner GlobalFoundries would become the supplier for the A9 chip.

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67 months ago

I agree that there always seems to be rumors like this. However, where there is smoke....

I think it only makes sense for Apple to keep trying to get other sources for their chips. At a minimum it gives them some negotiating power with samsung. More importantly having a sole source can be a weak link in the supply chain. It is always better if they can have multiple vendors providing the same component. If one vendor has a strike, or is otherwise unable to provide the component, it is good to have another vendor able to pick up some or all of the slack.

So Apple should be working on this. Regardless of what we think about samsung as a competitor, it just not make sense to have them as the sole source for critical components of Apple products, even in the best case scenario.


Single source is just how the SoC business works. It would take significant manpower to tape out a chip on two processes in the same time as one process.
Score: 2 Votes (Like | Disagree)
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67 months ago
Not sure why these rumors persist. They've never been proven to have the same chip fabbed at different houses like this before, and it's very unlikely because their development time nearly doubles. They'd also have to have a design ready that they never intend to use unless one supplier has insufficient yield.
Score: 2 Votes (Like | Disagree)
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67 months ago

I wouldn't be shocked if they already have test chips with both companies (or are working with each of them to lay it out).

We have had chips that can be fabbed at multiple foundries, but this is at a bigger 40nm with wider margins that allow it more easily.


We know Apple does custom layout optimization that would be difficult to normalize across processes.
Score: 1 Votes (Like | Disagree)
Avatar
67 months ago

Single source is just how the SoC business works. It would take significant manpower to tape out a chip on two processes in the same time as one process.

I wouldn't be shocked if they already have test chips with both companies (or are working with each of them to lay it out).

We have had chips that can be fabbed at multiple foundries, but this is at a bigger 40nm with wider margins that allow it more easily.
Score: 1 Votes (Like | Disagree)
Avatar
67 months ago
*****, I was looking forward to that 14nm Samsung chip #

Not to mention their new RAM and NAND.
Score: 1 Votes (Like | Disagree)

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