TSMC Likely to Retain the Bulk of Apple's Chip Business in 2015 due to GlobalFoundries 14nm Tooling Delays
In November we posted a report titled "Did Apple Really Sign a Deal with Samsung for 80% of their 14nm Processors?" While everyone in the press was quick to claim that Samsung won back Apple's A9 business for 2015, we were skeptical of the story and now there's more data that has surfaced that just might throw cold water on that rumor. Report Update Dec 31 8:30 am
Market Intelligence & Consulting Institute (MIC), based in Taipei, Taiwan, is a premier IT industry research and consulting firm providing intelligence, in-depth analysis, and strategic consulting services on global IT product and technology trends, focusing on markets and industries in Asia-Pacific.
During a press conference of theirs held on December 27, they noted that Taiwan Semiconductor Manufacturing Co (TSMC) the world's top contract chipmaker, could continue to be the main supplier of Apple Inc's A9 processor used in its next-generation iPhones and iPads next year. A second report surfacing today reveals that MIC may indeed be correct in their assessment.
MIC stated during their press conference on technology industry trends for next year that the key for TSMC winning Apple's chip business over its main competitor Samsung was its superior production yield.
MIC director Chris Hung told reporters on the sidelines of the event that "The two companies' technological capabilities are similar, so the key factor will be whose mass-production yield is better." Hung added that the chances of TSMC remaining the main supplier are higher because of its better yields.
In light of that forecast it was interesting to note today that a new supply chain rumor has surfaced claiming that GlobalFoundries is likely to delay their 14nm ramp-up which could "hurt Samsung Electronics bid to win back Apple's chip business in 2015. The rumor was made by semiconductor equipment observer Robert Maire of Semiwatch Maire.
The report noted that "GlobalFoundries in April 2014 announced a strategic partnership with Samsung Electronics to license and manufacture the same 14LPE and 14LPP technologies. The collaboration will leverage the companies' worldwide manufacturing capabilities, with volume production at Samsung's fabs in Hwaseong, Korea and Austin, Texas, as well as GlobalFoundries' fab in Saratoga, New York.
Part of the pitch to Apple by Samsung was the availability of an independent, US based supplier," noted Maire in a recent Barron's.com report. GlobalFoundries 14nm ramp-up delay could be related to financial or yield issues.
Maire wrote that "We have confirmed through numerous sources that over the last two weeks GlobalFoundries has stopped deliveries of tools for 14nm to its fab and instead is having the tools housed at a nearby warehouse."
More importantly Maire noted that "We hear that tool makers are told that the fab facilities are not ready and it sounds like a one to two quarter delay." That kind of delay could hurt Samsung's chances of taking back Apple's business, which supports MIC's recent forecast that TSMC is likely to retain the bulk of Apple's A9 chip production in 2015.
Report updated Dec 31, 2014 8:30am:
Jason Gorss, Senior Manager, Technology Communications, GlobalFoundries responded to the new rumors by communicating with SemiWiki. The reported communication was follows:
Our 14nm plan has not changed. A key part of the strategy is to order tools ahead of facility readiness to enable the fastest possible ramp. Due to the large number of tools coming in, we have our vendors stage these tools at a nearby warehouse to facilitate a fast install. This logistical move is in no way related to yield challenges or a delay in our technology ramp and is, in fact, quite the opposite. Our Fab 8 ramp is on track and we have yielding customer product on our 14nm technology.
Oddly the communication never mentioned "Apple's orders," so this doesn't put the issue to rest. Also see our comment area below for an interesting note from China Lee.