TSMC spends huge amount of money to buy new equipment to prepare for A10 chip? TSMC's 16nm process capacity is almost entirely occupied by Apple and chip factories on both sides of the Taiwan Strait

TSMC's large investment in equipment at this time shows that they are very confident that they are likely to get most of the orders for Apple's A10 chip. Earlier news from the supply chain showed that TSMC will be the only manufacturer of Apple's iPhone7A10 chip. TSMC seems to be not only busy completing this year's Apple orders, but also preparing to get more Apple A series chip orders in the future.

According to the latest news from Taiwan media, TSMC recently invested 80.81 million US dollars to purchase new facilities and equipment from Taiwan M+W High Tech Projects and United Integrated Services , according to the documents of Taiwan Stock Exchange. In addition, TSMC has reserved a budget of 9-10 billion US dollars for 2016 to develop its new 10- nanometer process technology and more advanced future technologies related to chip production.

Assuming that TSMC splices its own 10nm process technology and wins all orders for Apple's A10 chip, the new generation of A chips will be lighter and cheaper than the A9 chip in the iPhone 6s , and will also be more conducive to extending the battery life of the device.

At present, neither Apple nor its suppliers will confirm whether TSMC has won all of Apple's A10 chip orders, but TSMC's large investment in purchasing equipment at this time shows that they are very confident and believe that they are likely to get most of Apple's A10 chip orders.

But this is not good news for Samsung.

For Samsung Electronics, the loss of chip orders is not only a tangible loss, but also a symbolic blow. In its third-quarter 2015 earnings report, Samsung Electronics said its operating profit had increased year-on-year for the first time in seven quarters. It was not the smartphone business that helped Samsung Electronics' performance pick up, but its semiconductor business, which saw operating profit increase by 62% year-on-year, accounting for nearly 50% of the company's total revenue .

In addition, Samsung Electronics also specifically mentioned that the growth of its 14nm manufacturing plant will enable it to continue to produce products after the A9 chip, thereby increasing future profits. Although Apple's orders should still help boost Samsung Electronics' operating profits in the short term, the decision to entrust the A10 chip to TSMC will inevitably affect the latter's future performance.

On the other hand, the symbolic blow may affect Samsung Electronics' 14nm chip production business. Earlier reports said that iPhones equipped with chips produced by Samsung Electronics had overheating, which would undoubtedly greatly damage the battery life. Although Apple later refuted such reports, saying that the battery life changed by only 2% to 3% . However, Apple's abandonment of Samsung Electronics may scare away other smartphone manufacturers who are interested in cooperating with the latter. Just as there were previous reports that Qualcomm's Snapdragon810 flagship chip easily made the phone overheat, it was later reported that Samsung Electronics would abandon Qualcomm chips.

Whether it is because of the latter's chip production level or the better technology mentioned later, Apple's abandonment of Samsung's electronic products is a major good news for TSMC. Currently, Apple accounts for more than 14% of TSMC's total revenue. It is expected that in the 2015 fiscal year that is about to end , Apple will contribute $ 3.7 billion to TSMC's revenue, while the latter's total revenue will reach $ 26.24 billion.

TSMC is reportedly working with Apple to introduce integrated fan-out wafer-level packaging technology, a breakthrough that will make chips thinner and lighter. It is for this reason that TSMC won all orders for the A10 chip, and the company's Apple-related revenue is expected to grow 24% to $ 4.6 billion in 2017 .

Source : Weiphone

TSMC's 16nm process capacity is almost entirely occupied by Apple and chip factories on both sides of the Taiwan Strait

Source: Digitimes

In 2016 , in addition to Apple being TSMC 's most important 16nm process customer, MediaTek, HiSilicon and Spreadtrum have all actively introduced 16nm process mass production at TSMC, significantly increasing the proportion of IC design companies on both sides of the Taiwan Strait investing in TSMC's advanced process. In 2016 , in addition to supplying Apple's product demand, TSMC's 16nm process production capacity has almost been fully taken up by IC design companies on both sides of the Taiwan Strait.

Recently, MediaTek, HiSilicon and Spreadtrum have been continuously increasing their investment in mass production at TSMC. Faced with the news that major international mobile device chip manufacturers have successively transferred orders, and the continued weakening of global PC chip suppliers' investment momentum, not only have the proportion of TSMC's advanced process orders increased, but the proportion of TSMC's customers will also be reshuffled in the future, with IC design companies on both sides of the Taiwan Strait playing a key role.

In 2015 , MediaTek, HiSilicon and Spreadtrum ranked third, seventh and ninth among global IC design companies respectively, and their market shares continued to grow. Leading chip manufacturer Qualcomm turned to Samsung Electronics' 14nm process orders, and Broadcom ranked second in revenue with Avago . NVIDIA and AMD, ranked fourth and fifth, still mainly engaged in global PC- related chips, and their orders for TSMC's advanced process were difficult to improve.

As for MediaTek, HiSilicon and Spreadtrum, they continue to expand their global mobile phone chip market share and have the capital to continue investing in TSMC's advanced process technology. Their wafer output has been rising all the time. In this process of one rising and the other falling, in 2016 , TSMC's 16nm advanced process production capacity, except for supplying Apple, has been almost exclusively booked by IC design companies on both sides of the Taiwan Strait.

Currently, new-generation mobile phone chips including MediaTek's new P20 , HiSilicon Kirin 950 and Spreadtrum SC9860 are all mass-produced using TSMC's 16nm process. This can be said to be the first time that TSMC has had IC design companies from both sides of the Taiwan Strait serve as the main customers of its advanced process, rather than other international chip manufacturers playing the key role.

In the past, almost all of TSMC's customers were foreign chip suppliers, and Taiwanese IC design companies were hardly noticed. However, with the rise of IC design industry forces in various chip markets on both sides of the Taiwan Strait, and the gradual maturity of the global mobile device market, the chip price war has intensified, causing many international chip suppliers to begin to fade out of the market, further boosting the growth space for IC design companies on both sides of the Taiwan Strait.

The situation in which TSMC's first two generations of advanced process production capacity were always monopolized by international chip giants has almost become history. The change in TSMC's advanced process customer structure not only highlights the continued rise of IC design companies on both sides of the Taiwan Strait in the global chip industry, but also shows why TSMC has accelerated the pace of building a 12- inch wafer factory in Nanjing, China.

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