TSMC may be losing A-series chip orders to Samsung



There’s a line in 1990’s The Godfather: Part III when Al Pacino’s Michael describes his inability to extract his family from a life of crime, saying: “Just when I thought I was out, they pull me back in.”

Much the same could be said for Apple’s relationship with long-time chip supplier and bitter rival, Samsung. Having previously heard that Apple was handing the majority of the iPhone 6 chip orders to Taiwan Semiconductor Manufacturing Co Ltd (TSMC), a new report suggests that TMSMC is now likely to lose future orders (most likely for the next-next generation iPhone 6s) back to Samsung.

KGI Securities analyst Michael Liu claims that TSMC will be supplanted by Samsung in the production of 14-nanometre A-series smartphone chips for Apple and Qualcomm, beginning in the second half of 2015.

The report states that Qualcomm’s already started working with Samsung to develop the chips, according to The Commercial Times, citing market speculation. The Economic Daily News claims that Qualcomm had placed orders with Samsung, although does not cite any sources.

Exactly why Apple would choose to go with Samsung over TSMC is unknown, although our original report noted that some skeptics had suggested that TSMC wouldn’t be able to deliver the increasingly complex chips to Apple’s satisfaction. Our original report on the story cited one source as saying that, “TSMC has assigned a large team to support Apple as you know this client is very picky.”

The reports of Samsung being awarded the chip orders had a negative impact on TSMC shares — sending them down 4.6 percent in Thursday mid-morning trade compared, with a 1 percent decline in the benchmark index.

Source: Reuters