Taiwan Semiconductor Manufacturing Co (TSMC) has already started shipping the first batch of processors to Apple in the second quarter of 2014, according to sources familiar with the matter speaking with the Wall Street Journal. This is bad news for Samsung, previously Apple’s exclusive chip provider, because it will see its Taiwanese competitor supplying the A-series chip, the heart of iDevices.
The TSMC–Apple deal is seen as beneficial to both companies: the iPhone maker can ease its reliance on Samsung, and TSMC can boost its revenue with the addition of another high-profile client. According to analyst estimates, the A-series chips would account for roughly 10% of TSMC’s revenue this year.
In addition, Apple has reportedly reduced its iPad and iPhone display purchases from Samsung, suppliers say, as well as diversified its supplier list by adding other memory chip manufacturers than Samsung, such as SK Hynix Inc. and Toshiba.
According to sources speaking with the WSJ, TSMC started mass producing the A-series processors using a 20 nm process back in the first quarter, which corroborates earlier reports. Now it remains to be seen whether TSMC will be Apple’s sole provider of A-series chips as reported, or whether the supply will be shared with Samsung.
Apple is also said to be working with TSMC on a more advanced, 16 nm chip manufacturing technology, which the chip maker plans to use in large scale next year.