TSMC signs up Apple for three-year deal; A deal whereby TSMC replaces or supplements Samsung, the incumbent supplier of Apple processors, has rumored for several years, but it appears that TSMC’s supplier status is about to begin

June 26, 2013 Leave a comment

TSMC signs up Apple for three-year FinFET deal

Peter Clarke

6/24/2013 6:48 AM EDT

LONDON – Taiwan Semiconductor Manufacturing Co. Ltd. is set to supply Apple with processors using its FinFET process at the 16- and 10-nm nodes, after beginning with 20-nm planar CMOS, according to a report from Digitimes that referenced unnamed sources. TSMC’s IC design service partner Global UniChip, which works with customers to help prepare chips for the foundry, is also involved in the three-year deal, Digitimes report said. A deal whereby TSMC replaces or supplements Samsung, the incumbent supplier of Apple processors, has rumored for several years, but it appears that TSMC’s supplier status is about to begin. TSMC is expected to begin supplying a processor called A8 in July 2013 made on 20-nm CMOS and ramp up production “after December,” Digitimes said. TSMC is then scheduled to produce A9 and A9x processors in the second half of 2014. The timing indicates that A9/A9x processors are destined to be produced in TSMC’s 16-nm FinFET process. Both TSMC and Global Unichip said they do not comment on customer orders, Digitimes said.At Long Last, Has Apple Inc. (AAPL) Hooked Up With Taiwan Semiconductor Mfg. Co. Ltd. (TSM)?

By THE MOTLEY FOOL in News

Published: June 25, 2013 at 10:31 am

Investors have been talking about Apple Inc. (NASDAQ:AAPL) hooking up with Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) for years. However, switching chip foundries is much easier said than done and the transition can take quite a while. Well, DIGITIMES now reports that the long-rumored deal has finally been inked as Apple continues to distances itself from Samsung.

Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) has inked a three-year deal with the Mac maker, according to the Taiwanese publication’s supply chain sources. The chip manufacturer will provide the next three generations of A-chips to Apple Inc. (NASDAQ:AAPL), which will progress to 20-nanometer, 16-nanometer, and then 10-nanometer manufacturing processes. Currently, Apple’s latest A6 is built on Samsung’s 32-nanometer node.

Test runs for the A8 may start as soon as next month, with 20-nanometer production ramping up next year to correspond with new infrastructure slated for the same time frame. Some of the production capacity could get upgraded later for 16-nanometer chips. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) is supposedly scheduled to mass produce the A9 and A9X in the third quarter of next year.

DIGITIMES says the A8 will power the iPhone due out in 2014, and the A9 and A9X subsequently should be found in the 2015 models. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) has already begun early stage risk production for its 20-nanometer node, which commenced in the first quarter.

There was no mention of whether or not this deal was exclusive or not. That still leaves the possibility of Apple Inc. (NASDAQ:AAPL) tapping Intel Corporation (NASDAQ:INTC) for foundry services, another partnership that’s been rumored a time or two. Intel Corporation (NASDAQ:INTC) ex-CEO Paul Otellini admitted that not partnering with Apple on the original iPhone was one of his biggest regrets, and perhaps new CEO Brian Krzanich will make up for it. The chip giant has already begun to offer foundry services to smaller customers in order to utilize its idle capacity and unrivaled manufacturing prowess.

Apple Inc. (NASDAQ:AAPL) surely wants to cut Samsung out of the loop, and Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) and Intel Corporation (NASDAQ:INTC) would be happy to pick up the slack.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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