While TSMC is seen as a Leading A10 Chip Supplier in 2016, keep an eye on GlobalFoundries Future Moves
There was a battle throughout the year as to who would gain the bulk of Apple's A9 business. The war in the news got so crazy at one point that we posted a report titled "No One Seems to Know who Won Apple's iPhone Chip Business," and said that we'd stop reporting on who was the winner in the A9 war until it was revealed in an official teardown. One argument made throughout the year was that TSMC couldn't gain any A9 business because they couldn't produce a 14nm processor and that Apple would never have two different size chips in their iPhones. Well, we now know that Apple indeed has two different processors as was first reported on by Chipworks on Monday.
Chipworks noted in their report that "On the other hand, for Apple to go through all the trouble of dual-sourcing a custom designed part and launching on day one with both parts, suggests major sourcing problems."
Looking to next year's iPhone 7, the Chinese media wasted no time in claiming that TSMC would be the exclusive iPhone-7 A10 chip supplier. The report noted that TSMC will offer its in-house developed backend integrated fan-out wafer-level packaging (InFO-WLP) for the production of the A10 chips. The A10 will be featured in the iPhone 7 series slated for launch during the third and fourth quarters of 2016.
While I'd love to hear that Apple will shut out Samsung for their A10 processor business in 2016 as the Chinese report suggested, we're likely to once again hear rumors in 2016 that Samsung is back in the race along with GlobalFoundries. The good news is that TSMC has finished or is in the process of finishing their new plant which will give them the capacity to supply Apple with A10 processors in volume. TSMC had the exclusive contract for Apple's processors before, so it's not impossible that they'll win it again. Though one eye should watch for what happens with GlobalFoundries going forward.
Keep an Eye on GlobalFoundries
A new report emerging today interestingly gives us a heads up that GlobalFoundries wasn't happy about how things turned out with the A9 processor business working with Samsung.
The new report interestingly notes that "GlobalFoundries plans to develop 10nm process technology in-house instead of relying on licensing from Samsung."
In April 2014, GlobalFoundries and Samsung jointly announced their collaboration to deliver production capacity for 14nm FinFET process technology, which was developed by Samsung and licensed to GlobalFoundries. GlobalFoundries and Samsung had teamed up to successfully grab 14nm chip orders from Apple.
But now the partnership between GlobalFoundries and Samsung has begun to lose its competitive advantage, the sources said. Though the pair beat TSMC in the 14/16nm FinFET race, TSMC has quickly improved the yield rate of their 16nm FinFET and is ramping up the process production quickly. That's why TSMC has won a nice chunk of Apple's A9 processor business contrary to past rumors.
For GlobalFoundries, paying Samsung licensing fees will be more expensive than using IBM's IPs to develop its own technology, the sources suggested. Besides, GlobalFoundries recently completed its acquisition of IBM's microelectronics business.
The addition of engineering workforce from IBM's chip-manufacturing unit will surely make a positive contribution to GlobalFoundries' development of 10nm and more advanced process technologies in-house, the sources said.
We all know that Apple loves to have 2 or 3 supplies for every given iDevice component so that they could play one against the other in negotiating for better pricing. Having GlobalFoundries emerge independently with a 10nm processor that's not tied to Samsung could be beneficial to Apple going into 2016-2017 seasons and beyond. We'll keep an eye on this development going forward as it could be interesting.
Side Note: Yesterday there were several reports on IBM's carbon nanotube breakthrough. Silicon chips are nearing their end and this new technology could pave the way for the Internet of Things (IoT) revolution and beyond over the next decade. GlobalFoundries could be one of the first to adopt the technology as they're a member of the IBM research project and act as IBM's exclusive processor manufacture for the next decade.
I'm sure that Apple is keeping an on eye on this development as well considering that they're in partnership with IBM for MobileFirst that is bound to lead to IoT solutions in the future. For more on IBM's carbon nanotube breakthrough, you could check Wired UK's report here.