“Apple’s recently announced low-cost iPad (known simply as the iPad) is an interesting device; it’s essentially a variant of the company’s older iPad Air 2, with some changes that ultimately allow Apple to sell it at a modest price point ($329 for the entry-level variant with 32 gigabytes of storage) while maintaining reasonable margins,” Ashraf Eassa writes for The Motley Fool.
“Although the device is, in my view, a win for Apple, there’s one Apple supplier that stands to lose from Apple selling this new iPad, rather than a price-reduced iPad Air 2: Taiwan Semiconductor Manufacturing Company,” Eassa writes. “I believe that the A9 is both cheaper to manufacture and simply a better processor than the A8X found inside the iPad Air 2… It’s worth noting, though, that the A8X was manufactured exclusively by TSMC. This means that had Apple simply discounted the iPad Air 2 to the levels that the new iPad currently sells for, TSMC would see a clear benefit from any unit-volume upside that those price cuts might engender.”
“Recall that the A9 was (infamously) dual-sourced from both TSMC and its archrival Samsung,” Eassa writes. “Apple’s current supply arrangements for the A9 aren’t entirely clear, but it’s reasonable to expect that Apple is buying A9 chips from both Samsung and TSMC. If so, TSMC isn’t going to sell as many chips to Apple as it would have if Apple had used the A8X in the new iPad.”
Read more in the full article here.
MacDailyNews Take: There’s no telling, outside of Cupertino, what Apple’s sourcing mix is for the A9 currently.Even if a significant portion is from Samsung, this is the low-end iPad (entry-level) and, while it’ll sell in the millions of units this year, it’s still just a slice of total iPad sales and TSMC dominates in other iPad models and is set to be the exclusive chip fabricator for future iPads, too.