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.
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
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