Josh OngA source familiar with the matter told Reuters on Friday that test manufacturing of the next generation of chips, which are expected to make their way into devices in 2012, has begun.
"TSMC has got all the authorisation and details ready. Whether Apple puts in a formal order will depend on the yield rate," the source said. The report corroborates recent rumors suggesting the Cupertino, Calif., would tap TSMC for semiconductor orders as its relationship with Samsung has grown tense.
In June, numerous sources in the semiconductor industry claimed Apple would switch to TSMC for the A6 chip next year, with one report characterizing chatter about the deal as "deafening."
Early this year, it was said that TSMC could partner with Apple to produce the A5 chip for the iPad 2, but x-rays of the A5 revealed that Samsung has continued to manufacturer the custom processors.
The partial loss of Apple's business could come as a heavy blow to Samsung, which has warned of weakened demand for chips in the second half of 2011. The Korean electronics giant recently combined its component manufacturing businesses in hopes of buoying its display operations with the more profitable semiconductor side of the business.
While Apple is expected to be Samsung's largest customer this year with a estimated $7.8 billion in component purchases, the two companies are also fierce rivals and now legal opponents. Apple's top brass said in April that Samsung remains a "valuable partner," but tensions arising from the legal dispute between the rivals has worsened in recent months.
“It has become very public and very ugly, very quickly,†Gleacher & Co. analyst Brian Marshall said earlier this month after Apple filed a complaint with the International Trade Commission.
Andrew Orr
Wesley Hilliard
Christine McKee
Malcolm Owen
AppleInsider Staff
14 Comments
Lots of people were saying samsung was so large and their divisions so separate that the lawsuit wouldnt have an effect on what Apple purchases from them. I have been inclined to agree but it appears this may not be the case. I guess when you look at the bottom line (8 or so billion in sales) those far flung divisions may find that they should have a more unified gameplan.
What good is it to ship the manufacturing to TSMC only to have them as competitors in a few years?
The semiconductor manufacturing process sounds highly automated...perhaps it's something that can be done in North America with low operating costs? Intel has manufacturing plants here and they are not doing so bad after all.
Can it be that the cost of product leaks and IP theft (millions in lawyer fees alone) might be higher than the savings gained in lower manufacturing costs?
What good is it to ship the manufacturing to TSMC only to have them as competitors in a few years?
The semiconductor manufacturing process sounds highly automated...perhaps it's something that can be done in North America with low operating costs? Intel has manufacturing plants here and they are not doing so bad after all.
Can it be that the cost of product leaks and IP theft (millions in lawyer fees alone) might be higher than the savings gained in lower manufacturing costs?
I disagree, with that logic, Intel should be making entire computers... Since that is not the case this makes perfect sense.... Partner with a company that is not going to compete with you.
I disagree, with that logic, Intel should be making entire computers... Since that is not the case this makes perfect sense.... Partner with a company that is not going to compete with you.
What I am saying is that it's maybe just a matter of time before a supplier becomes a competitor.
And with my logic, Intel manufactures its own chips in the States and still makes a nice profit so why can't Apple do the same?
What I am saying is that it's maybe just a matter of time before a supplier becomes a competitor.
And with my logic, Intel manufactures its own chips in the States and still makes a nice profit so why can't Apple do the same?
Intel doesn't do most of its manufacturing in the US for either fabs or assembly test sites. Most of that happens in the Philippines (automotive chips) or Asia (non-automotive chips). Intel's US production is tiny in comparison.
Yes chip fab and assembly test sites are highly automated. The number of workers per production site has dramatically dropped over the last 20 years. The cost of the sites is huge. Multiple tens of billions of $US to build. A lower price for site construction could be a big draw along with less expenses for shipping raw materials.
TSMC, if I remember correctly, is what is called a headless fab. Many companies hire them to do chip production of already designed chips. Headless fabs don't do chip design. If they started using designs from one company for their own chip production all of their customers would drop them very quickly.
It could also be hard, but not impossible, for them to go to in-house design of consumer electronics since the engineers they employ are are production engineers not electronics engineers.
Over all they would be much less of a threat than Samsung or any of the other suppliers that already produce consumer electronics.