TSMC starts chip testing for Apple Inc
Source: Agencies |
July 16, 2011, Saturday
|
Print Edition
Print Edition
Taiwan-based TSMC has begun trial manufacturing of next-generation chips for Apple Inc's mobile devices, a source with knowledge of the matter said yesterday, a sign the iPad maker is shifting from its traditional chip supplier, Samsung Electronics.
Samsung is the sole supplier of the A5 chips used in the iPad 2, but Apple has hinted it is keen to diversify. The two are locked in a legal dispute over patents, and Samsung has also emerged as Apple's toughest competitor in the smartphone and tablet market.
Apple faces several hurdles should it want to make a switch to TSMC, including patents and chip design issues as well as a push by Samsung to retain the business.
"Apple is trying to diversify its orders but it will still maintain some kind of relationship with Samsung," said Fubon Securities analyst William Wang.
"I think TSMC will get the new chip orders, the issue however is allocation. Apple won't give the whole 100 percent to TSMC. Maybe it'll allocate only 20-30 percent."
Analysts and other sources had previously said TSMC, the world's largest contract chip maker, was set to become a supplier of a next-generation processor chip to Apple, likely starting next year. However, the chip may not be called the A6, as some reports have indicated, the sources said.
TSMC is an obvious candidate to win processor business from Apple as it has budgeted US$7.8 billion this year to update technology and add capacity. It also has experience with the architecture of British chip designer ARM Holdings Plc, widely used by Apple to make power-efficient mobile chips.
"TSMC has got all the authorization and details ready. Whether Apple puts in a formal order will depend on the yield rate," said the source with knowledge of the matter, who requested anonymity on the grounds of not being authorized to speak to the media.
The source did not provide further details of the orders.
Whether TSMC would get orders for the chips would depend on its yield rate, or the amount of chips per batch that come out with no defects, the source said.
The global semiconductor industry is set to grow 7.2 percent this year, boosted by soaring sales of tablets and smartphones, research firm IHS iSuppli said.
Samsung is the sole supplier of the A5 chips used in the iPad 2, but Apple has hinted it is keen to diversify. The two are locked in a legal dispute over patents, and Samsung has also emerged as Apple's toughest competitor in the smartphone and tablet market.
Apple faces several hurdles should it want to make a switch to TSMC, including patents and chip design issues as well as a push by Samsung to retain the business.
"Apple is trying to diversify its orders but it will still maintain some kind of relationship with Samsung," said Fubon Securities analyst William Wang.
"I think TSMC will get the new chip orders, the issue however is allocation. Apple won't give the whole 100 percent to TSMC. Maybe it'll allocate only 20-30 percent."
Analysts and other sources had previously said TSMC, the world's largest contract chip maker, was set to become a supplier of a next-generation processor chip to Apple, likely starting next year. However, the chip may not be called the A6, as some reports have indicated, the sources said.
TSMC is an obvious candidate to win processor business from Apple as it has budgeted US$7.8 billion this year to update technology and add capacity. It also has experience with the architecture of British chip designer ARM Holdings Plc, widely used by Apple to make power-efficient mobile chips.
"TSMC has got all the authorization and details ready. Whether Apple puts in a formal order will depend on the yield rate," said the source with knowledge of the matter, who requested anonymity on the grounds of not being authorized to speak to the media.
The source did not provide further details of the orders.
Whether TSMC would get orders for the chips would depend on its yield rate, or the amount of chips per batch that come out with no defects, the source said.
The global semiconductor industry is set to grow 7.2 percent this year, boosted by soaring sales of tablets and smartphones, research firm IHS iSuppli said.
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