TSMC Investing in 20-nm Chip Technology to Secure Orders From Apple in 2014

Taiwan Semiconductor Manufacturing Company (TSMC) is planning to invest in 20-nanometer (nm) chip technology in hopes of securing orders from Apple by 2014.

According to Taiwanese publication – DigiTimes, TSMC is currently facing shortages of processors built using 28-nm production process and wants to make an early investment in 20nm technology to ensure it can meet the demand of 20-nm chips.

DigiTimes reports:

“While having a tight supply of 28nm, TSMC now hopes an early investment in 20nm technology will help the foundry engage in collaboration with potential clients such as Apple in advance and ensure enough capacity to meet demand.”

TSMC will be investing $700 million in a 20-nm research and development line this year, which was originally set aside to be spent next year in 2013. Overseas sources in the supply chain reportedly believe that TSMC has a good chance of securing a deal with Apple in 2014 using the new 20-nm production process. Apple currently continues to use a 45-nm processor from Samsung with the new iPad, but they have switched to a 32-nm production process for iPad 2 that starts at $399 and Apple TV 3.

The report claims that Apple has stuck with 45-nm production process for the new iPad’s A5X chip as it is worried about potential shortages.

Apple has reportedly signed a major foundry agreement with TSMC last year to build future ARM-based processors to reduce dependency on Samsung for components of its devices, with whom it is fighting a patent war for blatantly copying the iPhone and iPad.

[DigiTimes via AppleInsider]