Apple finally signs deal with TSMC to move away from Samsung – WSJ

by: Bogdan PetrovanJune 29, 2013


The thorny relationship between Apple and Samsung is well known. From close partners, the two companies became fierce rivals following Samsung’s entry in the smartphone business, but years of lawsuits and obvious hostility haven’t stopped the two top players in the mobile industry from maintaining an uneasy cooperation.

Samsung currently manufactures the systems on a chip that act as the brains of the iPhones and iPads, as well as a part of the displays and memory modules for Apple’s mobile devices. But that will change soon.

WSJ reported yesterday that Apple has finally took the big step of signing with TSMC a deal that will see the Taiwanese chip foundry build Apple’s processors starting with 2014.

Meanwhile, the bulk of the chips in the iPhone and iPad will still be made by Samsung, though from 2015, TSMC will take over most, if not the entire production.

This long rumored deal was plagued by glitches in TSMC’s technology, says WSJ. Apparently, the first discussions between Apple and the Taiwanese company started in 2010, but until now, TSCM hasn’t been able to deliver the quality and quantity demanded by the Cupertino-based company.

What does this mean for Samsung? Mainly, it’s a financial loss. According to an analyst working for Sanford Bernstein, Samsung made about $5 billion from Apple’s chip business in 2012. It’s a significant amount of money for sure, but Samsung’s entire component business brought in about $59 billion in the same period, so the Koreans can certainly take the hit.

  • Fantastico

    Still waiting for that Exynos 5 Octa Samsung promised us back in January.

    • MasterMuffin

      Have you heard of this phone called Galaxy S4? :) Also Note 3 will most likely have it

      • Fantastico

        Yes. And there is a reason why the Galaxy S4 comes with a Snapdragon chip in every major market. The much-hyped Exynos Octa is vaporware at this stage. Last I heard over on XDA, it has poorly coded drivers which can’t perform proper core-switching.

        • MasterMuffin

          They couldn’t produce enough of them, that’s the reason for snapdragon versions. It’s not vaporware and it’s still currently the best performing chip in market (S800 isn’t in market yet). About that XDA thingy, links or it didn’t happen

          • kascollet

            Wake up dude. The story is obvious. Big.LITTLE is flawed, Octa is doomed. Only third-world markets will have it, because their complaints make much less sound than others’. Qualcomm will power EVERY high-end Android phone this year (and maybe the following).

          • MasterMuffin

            There’s nothing wrong with big.LITTLE and Octa is still the best performing chip… It’s true though that Qualcomm rules (and will rule) the mobile world thanks to openess and the stuff that’s built in it (and the performance is good too).

          • kascollet

            I think you’ll understand better how things really are when the Note 3 and the S4+ go out for sale with a Snapdragon inside. How many big.little chips did ever come to the market this year ? Not even one. How many Cortex A15 ? Only one… in a tablet (with power consumption issues !). How many Mali GPU ? Same story.

          • MasterMuffin

            As I said, Qualcomm rules the SoC world. But to say that big.LITTLE is flawed… It’s maybe a failure because Qualcomm didn’t adopt it, but the concept works

          • kascollet

            Yes, the concept works. This year, Samsung tried to make this concept an actual product… and GS4 got a Snapdragon :-)

          • MasterMuffin

            :D I don’t have anything else to say, I think I “lost”

  • MasterMuffin

    It’s a minor loss, but it’s still a loss. Maybe Samsung will now start to listen to customers and they’ll free Exynos? I want stable CM!

    • Piyush

      dont bite the hands that feed you

  • justin finely

    This article confirms that TSMC will have very limited supply of 20nm planer process. This is bad news for Qualcomm and Nvidia because they will be stuck at 28nm. With Intel supplying 14nm finfet in 2014, Apple will have inferior performance and battery life. Qualcomm and Nvidia will be competing for in the low cost and low performance markets against Meditek, which will collapse their margins. With Intel moving to 10nm in 2015, Apple and the others will fall further behind.

    • Rockwell mellow

      Its about more than just nano metres

    • Jusephe

      Original intel roadmap was 14 nm in 2014 and 10 nm in 2016, plus there are some rummors that intel will kill broadwell => keeping haswell in 2014 => not moving to 14 nm in 2014. This is interesting, because if true it actually means that Apple could temporally have the best process node, better than Intel’s 22 nm.

      • justin finely

        You are confusing Intel’s desktop roadmap with their mobile.

        There was never going to be a Broadwell desktop. Intel will be producing 14nm mobile icores this fall, with the Airmont(14nm Atom) next year. So in the fall of 2014, Apple will have a limited number of 20nm planer, Qualcomm will be at 28nm planer(same as now) and Intel will be shipping 14nm finfet. Intel’s platforms could easily have twice the performance as Apple and Qualcomm will be fighting meditek for lower performance market. In May, Intel’s VP in charge of future nodes said 10nm was finished and should be in production in 2015.

  • APai

    bleh, who cares :P

    • Jusephe

      Samsung cares a LOT.

  • mumusen

    I think Apple is being personal here. There are always different units in an organization. If Samsung Mobile is giving Apple a hard time in field.. Apple should innovate and create better and competitive products rather than excluding Samsung’s chip manufacturing unit from their main suppliers list. I guess Apple is taking a huge risk here. They must not forget, they tried doing something similar with their maps…. and… rest is history.

    • Topcat488

      I agree with most of your statement… But i think Apple should open its own factories rather than get its products from suppliers… Thank goodness they’re doing their iwatch in the U.S.A., it’s a start.

      • mumusen

        Agreed. in fact That would be an ideal situation for them. But that will include quite a lot of cost and maintenance etc which is why they are getting it outsourced. However there is always a beginning for everything.

  • Jusephe

    And another 5 bilion for memory and displays.

  • androidscales

    Apple is now crab apple

  • HitokiriX

    They better hope this doesn’t come back to bite them in the ass like when they switched from Saumsung to LG for the MBP displays. That pissed quite a few customers off.

  • R2D2

    Nobody loves me. :-(

    • MasterMuffin



    • Raw Jigga

      Thank goodness.

    • Fantastico

      Don’t worry, little guy, I love you.

  • faraday

    it’s a good thing.
    samsung now have more free factory slot to produce exynos processor.

    less apple chip=more exynos production, yay!

  • number29

    I wonder if Samsung will be able to plug the gap that Apple leaves when they withdraw their business? By all accounts Samsung will need to drastically expand their product portfolio as no other manufacture comes close to the quantities that Apple require (Galaxy S5 with 2 x octocore processors, just in case one breaks anyone?!).

  • hadi

    اشهد ان لا اله الاالله واشهد ان محمد رسول الله