Bernstein: Why Apple Will Leave TSMC Next Year

“Apple supplier Taiwan Semiconductor Manufacturing Co., or TSMC, was an analyst darling this spring. But TSMC’s fortune took a drastic turn in mid-July, after its management said the company may lose market share next year, especially in the 14nm processor arena,” Shuli Ren reports for Barron’s. “Last week, TSMC took another beating after its Taiwanese competitors UMC and Siliconware Precision Industries guided weak smartphone chips shipments outlooks. Shares of TSMC are down over 10% from a month ago and is now up only 17.9% year-to-date.”

Ren reports, “Always at the forefront of the technology, Apple will move on, regardless of the initial cost, argued Bernstein analysts Mark Li and David Dai: ‘Considering the performance/cost ratio of 20nm vs. 14/16nm, Apple’s history, and the competitive pressure, we believe Apple most likely will migrate from 20nm to 14/16nm in 2H15… 16-FinFET offers 30% better performance and 15% area reduction from 20nm. We think Apple can’t afford to ignore such substantial improvements.”

Read more in the full article here.

Related articles:
After Samsung’s rampant IP theft, Apple contracts with TSMC to stamp out A-series processors for iPhone, iPad – July 10, 2014
Samsung/Globalfoundries, TSMC fight to land Apple A9 processor orders – July 1, 2014


  1. Nay! Me thinks Apple inc. can afford what the US coffers cannot!!!
    If they chose to ignore the so called substantial improvements, it is because they can!

    1. Intel has 14nm expertise, I am awaiting Apple/Intel agreement to fab ARM SoC. I have read some compelling arguments recently that suggest this is the best way for Apple to satisfy their chip appetite and get off the Samsung habit at the same time. If this happened Samsung would be in a big hole.

    1. Could the folks downvoting the comment suggest who besides Samsung and Intel (which won’t fab a competing CPU) is available to build next-generation chips if TSC isn’t?

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