Currently, the microprocessors in iOS devices are made exclusively by Samsung, but it looks like that will change with the newest version of the iPhone, expected to be released this fall. The Wall Street Journal is reporting that chip fabrication giant Taiwan Semiconductor Manufacturing Co. has begun to ship its first batches of chips to Apple.
Last year, the TSMC supply partnership with Apple was publically announced, and murmurs earlier this spring pointed to TSMC producing the A8, the new chip design expected to power this fall’s new iPhones. So this news shouldn’t come as a surprise, although some observers questioned TSMC’s ability to produce Apple’s custom chips effectively at scale. TSMC won’t be completely supplanting Samsung — estimates from last spring indicate that TSMC could produce about 30 percent of Apple’s chips, which would still leave a large chunk of business for the Seoul giant.
Still, after years of Samsung producing not only chips but displays for Apple’s iOS devices, it does appear like CEO Tim Cook, a supply chain guru, is successfully diversifying its list of hardware partners. Samsung isn’t just a component supplier for Apple, it is also its primary rival in mobile devices. In the past few years, Samsung has been embroiled in mobile patent disputes with Apple. Considering the strained relationship between the two companies, it was only a matter of time before another company started fabricating the chips Apple needs. Samsung’s most recent earnings report indicated reduced revenue from its display and semiconductor divisions.
The chips that TSMC is shipping, according to the WSJ, use a 20-nanometer production processor, which should improve power efficiency over the 28nm die used for the current-generation A7. The report also says that Apple and TSMC will “work together on more advanced chips next year.”
Apple is expected to launch new models of iPhone later this year, with increased screen sizes, a slimmer iPod-touch-style design, and a super-hard sapphire crystal glass cover. In the fourth quarter of 2013, Apple sold nearly 48 million iPhones, so assuming it sells that many this year and TSMC is producing semiconductors for 30 percent of them, that’s a massive amount of chips.