Taiwan Semiconductor Mfg. Co. Ltd. Reportedly Wins Apple Inc. A11

By Ashraf Eassa, Jul. 21, 2016 – 

According to Economic Daily News (via DIGITIMES), Apple (NASDAQ: AAPL) has chosen Taiwan-based contract chip manufacturer Taiwan Semiconductor Manufacturing Co. (NYSE: TSM) to produce its next-generation iPhone applications processor dubbed the A11. More to the point, Taiwan Semiconductor is said to be the exclusive manufacturer of the A11, meaning that Samsung (NASDAQOTH: SSNLF) is out of the loop yet again. Implications for Taiwan Semiconductor

It had been widely reported that Apple had chosen Taiwan Semiconductor exclusively for the A10 that will be inside of this year's iPhone 7, something that DIGITIMES reiterated in summarizing the Economic Daily News report. However, it appeared that there was the possibility that the A11 would be split between Samsung and Taiwan Semiconductor, as had been the case with the A9 processor found inside of the iPhone 6s/6s Plus.

Taiwan Semiconductor, it would seem, was successful in getting all of Apple's A11 orders.

This actually isn't too surprising in light of comments from TSMC on the company's recent earnings call. Management said that it expected to have "more than 70%" market share at the 10-nanometer node in 2017, something that implied at least majority share of the A11 orders, if not outright exclusivity.

At any rate, if TSMC has won the A11 in its entirety, then the chip manufacturer won't have to worry about tough year-over-year comparisons from late 2017 through late 2018. In fact, since both A10 and A11 are said to be TSMC-exclusive, TSMC should actually benefit during the iPhone 8 cycle as it will have the orders for the chips that go into both the flagship iPhone as well as the discounted prior-generation model.

 Back