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Apple's new iPhones will be First to Market with 7nm Processors as most Competitors can't afford 7nm Costs

1 X cover next iphones with 7nm


On paper, Huawei is first to introduce a 7nm processor for their upcoming P20 Pro smartphone. In reality, Apple will launch the first smartphones sporting a 7nm processor which will provide iPhones with speed advantages. Samsung's new Note 9 is using a 10nm processor and the rest of the industry will hold back on using 7nm until 2019 because it's currently too expensive. That could mean that next-gen iPhones may be priced higher.


A new supply chain report published today states that due to sub-10nm node manufacturing is requiring huge capex, a number of foundries have slowed down their investment pace while fabless chipmakers will stick with 14/12nm products for cost reasons. Such scenario will likely turn a new leaf in the chip industry evolution, according to industry sources.


The cost of developing sub-10nm chips is prohibitively high. HiSilicon, Huawei's chip division, recently said it would spend at least US$300 million developing its new-generation SoC chip manufactured using 7nm process technology.


Fabless chip developers are aware that they have to spend big on sub-10nm chip development, and are concerned about whether such huge investment will pay off, the sources indicated.


Instead of developing the industry's first 7nm SoC chip, Qualcomm and MediaTek have both moved to enhance their upper mid-range offerings by rolling out respective new 14/12nm solutions, the sources noted. Questions have been raised about whether advancing to 7nm manufacturing node is necessary under the current circumstances, the sources said.


Both Qualcomm and MediaTek are believed to have postponed the launch of their 7nm chip solutions to 2019 from the previously-planned 2018, according to the sources. Nevertheless, the two major smartphone SoC providers may be racing to get their 5G solutions ready with respective first-generation 7nm chips, the sources said.


UMC has shifted its investment focus to mature and specialty process nodes instead of 7nm and Globalfoundries has decided to put its 7nm FinFET program on hold indefinitely. We reported on this development last week in a report titled "AMD Shifts their 7nm Business to TSMC for 2019 Ryzen Processors as GlobalFoundries Dumps 7nm Technology."


Globalfoundries said the company "is reshaping its technology portfolio to intensify its focus on delivering differentiated offerings for clients in high-growth markets." The company plans to shift development resources to make its 14/12nm FinFET platform "more relevant to these clients."


With most of Apple's competitors targeting the $200-400 smartphone market, 7nm is just too costly a move for them to make in 2018.


In the end, Apple's new iPhones with 7nm processors will be first to market and considering that Apple caters to the upper end of the market, it's not surprising.


Those buying Apple's new iPhones next month will definitely have something to brag about over their friends using Samsung phones with cheaper and slower processors. Huawei's new smartphones launching in October with 7nm aren't sold in the U.S.A.


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