Following up on talk that Taiwan Semiconductor Manufacturing Company (TSMC) is prepping to manufacture Apple’s A6X processor and whispers of Tim Cook & Co. negotiating a deal with the foundry to make mobile chips for iOS devices on its 20 nanometer process technology, China Times now quotes Chairman and CEO Morris Chang’s words that TSMC is close to achieving a hundred percent market share on its 28nm process technology.
But why have TSCM’s wafer shipments all of a sudden tripled, allowing it to achieve a virtual monopoly on the 28nm silicon? That’s where the Apple link comes into full view…
In 2012, 28nm chips accounted for about 12% of TSMC’s revenues, or $2.1 billion (NT$61.5 billion). Chang expects that figure to soar to $6.2 billion (NT$180 billion). The company recently posted fourth quarter revenues of $4.5 billion (NT$131 billion) and net income of $1.4 billion (NT$41.5 billion).
Now, TSMC will invest to the tune of $9 billion this year. Furthermore, the foundry will spend even more in capital expenditure in 2014 as it moves toward the more advanced 20nm and 16nm process technologies.
Conveniently, another Chinese publication reported last October that TSMC is slated to start fabbing iPhone and iPad processors in volume beginning with 2014.
Taking it all in, watchers believe such a sharp rise in TSMC’s market share has a massive Apple order written all over it.
Even Chairman and CEO Morris Chang acknowledges TSMC’s lock on the 28nm process technology:
We have enjoyed throughout the year, in spite of a lot of attempts at competition, close to 100% foundry market share in 28nm technology [in 2012].
It is important to note that TSMC also builds chips for Nvidia, Qualcomm and others. And, TSMC has also won orders from other firms, including AMD whose 28nm Kabini and Temash APUs will be produced by TSMC.
The A-series system-of-chips that power iOS devices are designed by Apple (the company’s semiconductor team is now 1,000+ employees strong) and have been exclusively fabbed by Samsung foundries. Lately, Samsung’s components arm is rumored to have been gradually losing those orders as Apple is increasingly looking to distance itself amid fierce competition with the Galaxy maker.
The high-resolution A6X floorplan courtesy of Chipworks.
TSMC reportedly turned down Apple’s $1 billion offer for exclusive access to its manufacturing capacity. That didn’t stop the pundits from speculating that the iPhone maker could be behind an upcoming semiconductor facility in Oregon, valued at $10 billion.
TSMC debunked the rumor, stressing it isn’t pouring money into the project on behalf of Apple. Project Azaela, as it’s code-named, is a 3.2-million-square-foot semiconductor factory that would employ at least 1,000 people.
Within the chip industry, the theory is that the fab would be a contract facility to build microprocessors for Apple’s mobile devices. DigiTimes Research has reasons to believe that an improved version of the existing A6X chip fabbed on TSMC’s 28nm process will make its way inside Apple’s refreshed iPad and iPad mini devices.
Samsung’s $14 billion plant in Austin, Texas mostly fabs Apple chips
Currently, the iPhone 5 and latest iPads run chips fabbed on Samsung’s 32nm process. Last year, Apple similarly went from Samsung’s 45nm process to the 32nm one for iOS device processors.
Last, but not the least, DigiTimes Research speculates that, based on their knowledge, TSMC’s cutting-edge 16nm FinFET process technology will play a key role in a “breakthrough” Apple product.
TSMC’s 20nm process should be able to enter mass production between Q4 2013 and Q1 2014 and will be followed by a newer 16nm FinFET node in less than one year. And that, my friends, is your time frame when you should expect seeing TSMC-made Apple chips cropping up in iOS devices.
And why you should care about any of this chip politics?
Because a reduction to TSMC’s 28nm fab technique – and later to 20nm and the cutting-edge 16nm FinFET node – will enable significant power savings and substantial performance gains for the iPhone and iPad engine.