“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.