Thursday01 December 2022

Apple and Qualcomm Lose Billion Dollar Exclusive Bid with TSMC

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It seems that Apple and Qualcomm wanted to try and lock out competition when it comes to the use of TSMC (The Taiwanese Semi-Conductor Manufacturing Corporation). The pair attempted to buy themselves a nice exclusive deal with TSMC with a large bundle of cash (over $1 billion). However, TSMC decided that there was more money to be had in keeping things open.  The original deal from Qualcomm and Apple was to make sure the pair had access to production facilities. TSMC replied by saying that they could always expand if there was a need, but that they would internally fund it.

Remember TSMC services nVidia, Qualcomm, AMD, Broadcom and more. These companies do have alternate foundry facilities they could turn to if TSMC bought into the deal from Apple and Qualcomm. Still the move does show something that we talked about earlier; Apple needs to move away from Samsung. Right now Apple is reliant on Samsung for manufacturing of their SoCs for the iPhone and iPad. These same SoCs were based off of Samsung designs and concepts, however once Samsung became a competitor to Apple (in the same way Google did) Apple went on something of a rampage and decided to try and sue them into the ground. They have recently won a $1BN reward from a US jury although that verdict and award is far from money in the bank.

Apple is in a rather sticky position right now. They have bitten the hand that feeds them in terms of parts for their products and even the place that their chips are made. On top of that they and the US have sent a rather nasty little message with this Verdict and the continued verbal diarrhea of the Jury foreman, Velvin Hogan. Before it was supposed to be about two companies fighting for IP rights, now it is a move to protect US innovation and IP.  We are sure that TSMC will not turn Apple’s money away any more than Foxconn will, but there is little chance of an exclusive deal even if they try to partner up with Qualcomm.

We are betting that Apple’s contract with Samsung for foundry services is getting near its end and now Apple needs to start looking for someone else to do the heavy lifting. The problem is that there are not many fabs that can manufacture ARM processors (which is what the Apple A series SoC is based on) at 28nm. This leaves Apple with a limited number of plant to turn to and a very annoyed manufacturing partner. Apple’s stock might be running high right now, but with the news that they can no longer guarantee a steady supply of core components we wonder how long that will last…

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Last modified on Wednesday, 29 August 2012 15:50

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