Apple price demands for next-gen iPhone's 'A9' chip could slow TSMC output

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Apple is asking Samsung and TSMC to accept price cuts on orders of A9 chips for its new iPhones, but TSMC's inclination to decline could result in the supplier having to scale back production capacity, a new rumor claimed on Tuesday.

Both Samsung and TSMC have 14- and 16-nanometer FinFET capacity ready to go for the A9, supply chain sources indicated to DigiTimes. Samsung has reportedly agreed to Apple's demands, going so far as to provide "almost-free" backend services for the chips, with the hope of becoming Apple's primary source.

TSMC has been more hesistant, the sources said, and if so might have to cut back on a planned 16-nanometer ramp-up in August from 30,000 wafers to less than 20,000. Orders from companies wanting similarly-sized chips would allegedly be too small to make up for the gap left by reduced Apple orders.

TSMC has reportedly insisted that the ramp of its 16-nanometer production is going ahead according to plan.

DigiTimes has a spotty track record on predicting Apple's future product plans, but it does have sources inside the Far East supply chain who have provided accurate information on Apple's partners.

Full-scale production of new iPhones may be imminent or already underway if Apple is planning to announce new devices on September 9. Recently, though, KGI Securities analyst Ming-Chi Kuo claimed that production would be delayed one or two weeks, even with capacity for older models being diverted.