Has TSMC Upset the Apple Cart?

I did NOT see this one coming. For months, unconfirmed rumors have been flying about TSMC courting Apple, in hopes of getting its A6 processor business. Conjecture was that one of the reasons they were building out assembly and test to provide end-to-end 3D IC manufacturing was to ultimately win Apple’s future 3D IC business (among other things, of course).  During a keynote last March at IMAPS Device Packaging Conference, TMC’s Doug Yu explained that a full spectrum of expertise that includes manufacturing excellence, capacity and customer relationships where there is no competition with the customer is needed. Many of us took this a jab at the Samsung/Apple debacle. 

So yesterday, when Ken Mason’s (@nanolithoman) tweet crossed my screen regarding a Bloomburg report in EE Times (TSMC said to rebuff Apple, Qualcomm)  I was floored. Upon further searching I also turned up this on Focus Taiwan: TSMC declines to comment on Apple, Qualcomm investment reportBoth articles reported that TSMC rejected offers from both Apple and Qualcomm, each for more than $1B for an exclusive supply of processor chips, headed for smartphones and tablets. Here’s the orginal Bloomburg report that started the whole thing. 

Really? After all that build up, TSMC said “no” to Apple?  (And not to diminish the Qualcomm end of this, but according to today’s news in Digitimes  they’ve got a big order of 28nm chips set to ship to the OSATS for Qualcomm in September, so they’ve clearly worked something out there.)

I tweeted as much to Ken Mason (@nanolithoman): “Interesting turn ofevents, for sure.” To which he replied: .”Perhaps TSMC understands that the path from “hero to zero” can be very short, …remember the Apple of pre-iPhone?:” True, very true.

Today, Tekla Perry Tech Talk blogger for the IEEE Spectrum (TSMC’s Morris Chang Says No to Apple, Qualcomm) blogged in support of the decision by Chang, saying he is “no sellout” and is “big on loyalty”.  Accepting the offer from Apple and Qualcomm would mean “dumping InVidia” and other long-established customers such as Broadcom and MediaTek. Perry says she came to these conclusions based on a conversation she had with Chang a year ago. She also says that while Chang said “no” to this offer, the offer for exclusive use of a single fab is open to each of them. 

I have no doubt that Morris change is the upstanding person Perry gives him credit for. But I also suspect it’s more that he’s a super savy business man. After all, you don’t get to be CEO of the world’s largest foundry by being Mr. Nice Guy!  ~ F.v.T.

(PS: By the way, nowhere in any of these articles, including the Bloomburg post that started all this, could I find direct references or quotes from TSMC, or Morris Chang. Mostly i read phrases like “TSMC declined to comment”. So suggest that we all take it with the proverbial grain of salt.)