To satisfy the huge demand from Apple, TSMC has begun equipment move-in for the phase-5 facility of its 12-inch fab located in southern Taiwan, the sources said. The Fab 14, Phase 5 facility will be ready for production by the end of 2013, the sources indicated.

Samsung Electronics, which produces APs for the existing iPhones, will still manufacture chips for the upcoming model scheduled to be released in the second half of 2013, the sources revealed. Nonetheless, Apple appears to be accelerating its plans to minimize its dependence on Samsung, the sources observed, judging from TSMC's pace of expansion at Fab 14.

TSMC broke ground for the phase-5 facility of Fab 14 in April 2012, followed by a beam-raising ceremony in November. Equipment move-in began in less than one year after the facility's ground-breaking.

Apple's push to use new suppliers in 2014 also extends to FLEXium Interconnect who will make flexible circuit boards for Apple's iPhone 7. Apple's move is to shift their application processors (AP) to TSMC is bound to hurt one of Samsung's division profits. With LG preparing to enter the AP market in the coming years and the Chinese phone makers planning a similar plan, it's all bad news for Samsung.

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