What TSMC has revealed about Apple’s future

“Taiwan Semiconductor Manufacturing Company’s Q3 earnings conference telecast shed much light on its partnership with Apple, as well as its future plans for the partnership,” Mark Hibben writes for Seeking Alpha. “It’s a win-win for both companies that will propel growth and innovation as they compete with arch rival Samsung. Increasingly, innovation is being driven by this rivalry, especially in smartphones, rather than traditional PCs.”

“During the telecon, TSMC made it clear what I have pretty much taken for granted, that ‘just one customer’ is taking most of TSMC’s 16 nm FinFET production,” Hibben writes. “That one customer cannot be other than Apple. Given that TSMC had only started ramping its 16 nm production at the beginning of Q3, and that reports have it that the company is supplying more than half of the A9 SOCs for the iPhone 6s/6s Plus, it’s unlikely that TSM has much production left for anyone else.”

“The key takeaway for Apple is that this is really a much better situation than what it had with Samsung,” Hibben writes. “Apple gets a foundry that doesn’t have conflicting motives and which Apple doesn’t have to worry about in terms of product information leaks. I really doubt that anything Samsung offered by way of ‘firewalls’ between its foundry and the electronics business could really have satisfied AAPL in the long run. Also, with TSMC, Apple has a great outlet for its offshore cash that can be used for competitive advantage. We might be surprised and see TSMC jump out in front in the race to 10 nm on the strength of Apple’s capital infusion.”

“TSMC’s management repeatedly referred to other opportunities in computing devices, based on its association with this ‘new breed’ of company, but wouldn’t go into details on the extent of the market opportunity,” Hibben writes. “TSMC spoke in generalities about general purpose computers, wearables, data center, networking, and Internet of Things. Clearly, the company expects its business with Apple to expand beyond the iPhone, at the very least to iPad, and probably beyond.”

Read more in the full article here.

MacDailyNews Take: Again, anything that removes slavish, serial copier Samsung from the equation is welcome and should be Tim Cook’s ultimate goal. Samsung has proven they do not learn and that they do not respect intellectual property. ASAP, the intransigent Samsung den of thieves should not be rewarded with Apple’s multi-billion-dollar supply orders.

6 Comments

  1. The spaceship leads when no company has ever gone before and Tim Cook is ushering in Apple’s new era with new strategies and partners.

    Let the games begin, byebye Samscum.

  2. 2016 will be the year of “TECHTRUST”.

    WHO?… do YOU trust?

    Now starts the “REAL” War……. the 80’s & 90’s are GONE MicoDickDroid doofuses!

    Bloodbath. Read between the lines inept tech sloths .!..

    Who has the most robust & secure mobile &!!! Desktop SDK of ALL tech companies globally today? Hm….. ???

    Yeah!! that Tinker Toy Computer Company… THATS WHO! you pompous A Holes!

    pomp•ous (pŏmˈpəs)
    adj. Characterized by excessive self-esteem or exaggerated dignity; pretentious: pompous officials who enjoy giving orders.
    adj. Full of high-sounding phrases; bombastic: a pompous proclamation.
    adj. Chracterized by pomp or stately display; ceremonious: a pompous occasion.
    More at Wordnik from The American Heritage® Dictionary of the English Language, 4th Edition

    FCK YOU! Our time coming ANY DAY!

  3. Its Great to see Samdung pay for its llowlife ways!

    BUT..as i have been saying all along…..
    GOOGLE is the main culprit by blatantly copying ios throug Erick Mole Schidths spying at Apples board!
    If anything.. Tim Cooks top proirity “in this realm” has to be to kick Googles butt as hard as it possibly can…
    I want to see pain for Google.. Alphabet .. Major pain.

  4. Putting aside the technical implications of extending the relationship with TSMC, it’s a very elegant way of productively using up some of Apple’s offshore cash. Apple ends up with better chips than it can get elsewhere, virtually exclusive use of the fastest improving chip fabricating facility on the planet, a partner that they know is trustworthy and it gets cheaper components. The only downside is that by using up offshore cash so productively, they could end up with even more offshore cash.

    It took a number of years to get to this stage, but it was obviously triggered by Samsung abusing their relationship with Apple. At that time there was no serious alternative who could manufacture the quantity and quality of chips that Apple needed, but Apple’s support of TSMC has paid off and we’re now seeing TSMC eclipsing Samsung.

    Samsung’s chip fab was a stand-out performer in Samsung’s recent financial turnaround, but they’re now been exposed as the supplier of Apple’s second best chips. Samsung is going to have a hard time negotiating decent deals with Apple in the future, partly because Samsung has behaved so treacherously in the past and more importantly because TSMC are doing a better job.

    Apple used to need Samsung, but it’s steadily weaning itself off of them, but Samsung stands to lose out significantly if Apple switch even more production to TSMC. Selling Android phones isn’t making them much money these days ( they’ve largely stopped talking about that business ) and Samsung’s chip fab business could have the rug pulled from under it in the future.

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