TSMC Signed on to Produce Apple's A8, A9 and Later

Unnamed industry sources report that Taiwan Semiconductor Manufacturing Company (TSMC) and its IC design service partner Global UniChip have secured a three-year agreement with Apple. They will supply foundry services for the iPhone maker's next A-Series SoCs using 20 nm, 16 nm and 10 nm process nodes.

According to the agreement, TSMC will begin producing Apple's A8 chip in small volumes starting next month (July). The company will ramp up its 20 nm production capacity after December 2013, and then install a batch of new 20 nm fab equipment -- capable of processing 50,000 wafers -- in 1Q14.

Sources said a portion of the upcoming production capacity, which will generate roughly around 20,000 wafers, will be upgraded to process wafers used to build 16 nm chips. Thus, TSMC is expected to produce Apple's A9 and A9X starting around the end of 3Q14. These will be used in next-gen iPhone and iPad products for 2015 whereas the A8 will be used for an iPhone slated to launch in early 2014.

TSMC will reportedly dedicate the phase-4, -5 and -6 facilities of Fab 14, its 12-inch fab located in southern Taiwan, to produce Apple's A-Series chips. Sources said this foundry will initially allocate a capacity of 6,000 to 10,000 12-inch wafers for the manufacture of Apple's chips. Output will rise gradually starting in 2014.

Previously, TSMC chairman and CEO Morris Chang said that the foundry's 16 nm FinFET process would enter mass production in less than one year after ramping up the production of 20 nm chips. Currently, risk production for its 20 nm process is underway, kicking off in the first quarter of 2013.

Additional reports insist that Apple "ditched" Samsung, but the source material said nothing of the sort. However, up until now, Apple has exclusively used Samsung as a supplier of its A-Series chips, but a number of factors seem to point to a growing parting of ways between the two companies. Those factors include bitterness between Samsung and Apple in the current patent wars, talk that the two planned to fulfill their contractual obligations and then move on, and Apple using Samsung less as a display provider.

Hints of TSMC's involvement with A-Series manufacturing surfaced back in January, indicating that Apple was sampling TSMC as a foundry with a trial production of its A6X SoC. Then in April, The Korea Times said that Samsung will not be a part of the A7 chip either. One of Samsung’s local partners in Korea told the paper that Apple was sharing confidential A7 info with TSMC.

"TSMC has begun ordering its contractors to supply equipment to produce Apple’s next processors using a finer 20-nanometer level processing technology," the source said.

Who needs daytime soap operas when you have Apple and Samsung.