WSJ: Apple signs deal with TSMC for iPhone, iPad chips to reduce reliance on Samsung


Wall Street Journal has just reported that Apple has finally signed the deal with  Taiwan Semiconductor Manufacturing Co. (TSMC) for making some of the chips for iOS devices, corroborating a report by DigiTimes earlier in the week, which had claimed that the deal was now complete.

TSMC will make the 20 nanometer Apple A8 chip starting in 2014, and they’ll also make future Apple chips using 16 nanometer and 10 nanometer chips when the technology is ready.

Who exactly is TSMC? You’ve probably heard of Qualcomm, right? The company that makes the “Snapdragon” line of mobile chips that power just about every Android phone on store shelves in Western markets . Their chips are actually manufactured by TSMC in Taiwan. So are NVIDIA’s chips actually. And so are many other company’s chips. TSMC isn’t the largest chipmaker in the world, but they’re pretty high up there.

WSJ provides some background behind the TSMC deal:

As early as 2010, Apple and TSMC started discussing working together to build the chips, say the TSMC executives. In 2011, TSMC senior executive Chiang Shang-yi met Apple officials to discuss collaborating on the complex process.

Apple asked to invest in TSMC, or to have TSMC set aside factory space dedicated to Apple chips, the executives say. TSMC Chairman Morris Chang rejected both requests because the company wanted to maintain its independence and manufacturing flexibility, the executives say. [..]

[..] This month, after years of technical delays, Apple finally signed a deal with Taiwan Semiconductor Manufacturing Co.  to make some of the chips starting in 2014, according to a TSMC executive. The process had been beset by glitches preventing the chips from meeting Apple’s speed and power standards, TSMC officials said.

Samsung won’t completely stop making chips for Apple, but it will help Apple to reduce its reliance on its arch-rival. Apple also did not work with Samsung on the development of its A6 chip that powers Apple’s iPhone 5 and simply used them as a foundry to manufacture the chip. Samsung had apparently contributed to the design and development of chips used in previous generation iPhones.

Apple has also reduced memory chip –  both dynamic random access memory (DRAM) chips and NAND memory chips orders to Samsung for the iPhone, iPad and iPod touch. Apple has also stopped using Samsung screens in the iPhone.

It doesn’t come as a surprise that the patent war in the court rooms around the world has contributed to the meltdown in the partnership.

via WSJ