Apple Inc’s move to seek a second source for its advanced chips apart from Samsung Electronics Co — possibly Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) or GlobalFoundries Inc — is likely to take a few years rather than a few quarters, a semiconductor industry insider said.
However, Samsung’s increased ambitions in the foundry business will push it to challenge GlobalFoundries for the world’s No. 2 position as soon as this year, IC Insights Inc president Bill McClean said in his latest industry report, issued on Tuesday.
Last year, Samsung nearly doubled its foundry sales to US$4.33 billion, from US$2.19 billion in 2011, surpassing Taiwan’s United Microelectronics Corp (UMC, 聯電) to become the third-largest semiconductor foundry in the world.
TSMC remained the world’s top foundry, with sales increasing 18 percent year-on-year to US$17.17 billion last year, which was almost four times that of second-ranked GlobalFoundries, whose sales grew 31 percent annually to US$4.56 billion, according to the US-based semiconductor market research firm.
UMC was the fourth-largest foundry last year, with sales decreasing 1 percent year-on-year to US$3.73 billion, followed by China’s Semiconductor Manufacturing International Corp (SMIC, 中芯), which saw its sales rise 27 percent to US$1.68 billion, IC Insights said.
“Samsung has the ability (ie, leading-edge capacity and a huge capital spending budget) and desire to become a major force in the IC foundry business,” McClean wrote, adding that he believes the company has set its sights on the No. 2 spot this year after expanding its foundry sales by 98 percent last year and 82 percent in 2011.
McClean said Apple last year accounted for 89 percent of Samsung’s total foundry sales and therefore the South Korean company would have to seek ways to make up for the potential sales loss if Apple shifts to other foundries to produce its custom processors, such as TSMC, GlobalFoundries and possibly Intel Corp.
Last month, Credit Suisse’s regional research head, Manish Nigam, said in a report that he expected TSMC would likely secure orders from Apple to produce next-generation processors as early as the second quarter of this year, faster than his original prediction of either late this year or early next year.
However, McClean disagreed, saying for the time being Apple must still rely on Samsung for advanced processors used in iPads, iPhones and high-end iPods. Moreover, it would be difficult for TSMC to allocate much of its production capacity to Apple because the Taiwanese firm was working at over 100 percent utilization throughout the first three quarters of last year, he added.
“One important factor that is oftentimes overlooked with regards to the Samsung/Apple IC supply relationship is the large amount of memory, both DRAM and flash, that Apple buys from Samsung,” McClean wrote in the report.
“Since Apple is such a big memory customer, Samsung is able to ‘bundle’ its IC offerings to Apple and deliver a cost-effective high-volume supply of leading-edge flash memory, DRAM and application processors to the company,” he said.
While the two companies will still engage in patent lawsuits and in market competition in the foreseeable future, Apple will continue its “marriage of convenience” with Samsung at the chip level, McClean said.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
Prices of gasoline and diesel products at domestic gas stations are to fall NT$0.2 and NT$0.1 per liter respectively this week, even though international crude oil prices rose last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices continued rising last week, as the US Energy Information Administration reported a larger-than-expected drop in US commercial crude oil inventories, CPC said in a statement. Based on the company’s floating oil price formula, the cost of crude oil rose 2.38 percent last week from a week earlier, it said. News that US President Donald Trump plans a “secondary
RSS