Sat, Dec 27, 2014 - Page 13 News List

TSMC likely to stay key Apple supplier

CHINA RISING:While China is rapidly expanding its semiconductor industry, Taiwan still has the technological edge in design, manufacturing and packaging, the MIC said

By Lauly Li  /  Staff reporter

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, could continue to be the main supplier of Apple Inc’s A9 processor used in its new-

generation iPhones and iPads next year, a market researcher said yesterday.

The key for TSMC to win over its main competitor, Samsung Electronics Co, in vying for Apple’s orders is its production yield, the Market Intelligence and Consulting Institute (MIC, 產業情報研究所) told a press conference on technology industry trends for next year.

“The two companies’ technological capabilities are similar, so the key factor will be whose mass-production yield is better,” MIC director Chris Hung (洪春暉) told reporters on the sidelines of the event.

Hung added that the chances of TSMC remaining the main supplier are higher because of its better yields.

Samsung also produces advanced 20-nanometer (nm) chips, but its yield is not satisfactory, Hung said.

“However, as Apple tends to spread the risks, it is likely that the winning supplier of A9 will not take all the orders,” Hung said.

The MIC holds a positive view of Taiwan’s semiconductor industry next year, despite China’s determination to develop its chip industry, Hung said.

“Although Beijing is to back up the development of its semiconductor industry with an industry-supporting fund of 120 billion yuan [US$19.29 billion], Taiwan still has its technological advantages in terms of design, manufacturing and packaging in the global market,” Hung said.

He said it would take three to five years for China to become a real threat to the Taiwanese industry, but some Taiwanese companies have started to take proactive measures against the rising competition.

Handset chip supplier MediaTek Inc’s (聯發科) 300 million yuan investment in a Chinese government fund and United Microelectronics Corp’s (UMC, 聯電) US$1.35 billion planned investment in a new foundry in Xiamen demonstrates the two companies’ determination to deepen cooperation with China and to benefit from the rapid growth in the world’s largest semiconductor market, he said.

Hung said he expects mergers and acquisitions among Chinese semiconductor companies in the next two or three years, adding that Chinese companies might integrate their upstream and downstream suppliers via strategic cooperation with international companies.

“International semiconductor companies Intel Corp and Samsung both attempted to secure their positions in the Chinese market through investments in chips plants in the country,” Hung said.

Intel has two chips plants in Chengdu (成都) and Dalian (大連) cities, and Samsung established its first semiconductor fabrication plan in Xian (西安), he added.

Hung said the global companies’ moves in China would push Taiwanese companies to secure the positions in the Chinese market as soon as possible.

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