Is Apple switching foundry partners?

2/15/2011 1:49 PM EST

If Apple builds or buys a FAB to produce its own parts then it will be their DOWNFALL...!!

2/15/2011 4:38 PM EST

Apple only needs a few things. CPUs and flash memory. If they focused on this alone they could secure their supply chain. Focus would be the real road to success.

2/15/2011 5:31 PM EST

Seems like sticking to what they do best is the secret to their continued success... Their own fab would likely be more of a distraction than a help.

2/15/2011 8:28 PM EST

I don't agree Apple to have its own fab. Apple only need to focus on product design and probably some chip designs if they are valued to the company. There are plenty of large fab for Apple to choose from so I don't see any good reason for Apple to build its own fab.

2/15/2011 11:18 PM EST

Since Samsung is competing with Apple with their own Hummingbird/Orion/Exynos CPU, this is a logical decision. Apple wouldnt want samsung to know what is its next step. BTW samsung hummingbird was originally based on Intrinsity ARM core, which Apple acquired. Since then Apple/samsung would have diverged their paths in CPU development.

2/16/2011 5:42 AM EST

I concur with the above comments. Apple need to concentrate on their own competitive advantage (design) and leave the fabrication to others. Parting ways with Samsung is logical as the two are increasingly competing in the mobile arena.

2/16/2011 9:55 AM EST

I will agree Apple should focus on its innovation, not those commodity SoC or flash. If they could come up unique requirements, I believe every major SoC vendors will do everything for them to gain their business. And Apple could cherry pick the best. Why bothering even to design its own SoC? I think it is silly decision for Apple to start with.

2/16/2011 12:34 PM EST

In the end its Samsungs's loss and TSMC's gain. Not sure if APPLE is serious about building its own fab, but they can certainly buy one.

2/16/2011 2:16 PM EST

I’m having difficulty with this entire thread. The sky is not falling and “Apple jumping ship and moving to TSMC,” is insane.

When the volume of business is in the billions of dollars and the capital needed to supply the parts is in the billions of dollars, nothing moves without protection of IP and investment needed to deliver. It’s just that simple. At the same time we do live in a competitive world and single sourcing is extremely dangerous. To that end I say Apple must explore alternatives to Samsung. Samsung was has been and will continue to be in the phone and computer business for over a decade. Apple knew this going in as did Samsung. Hurray for TSMC, for making the pitch and generating press that it is expanding and hinting it’s on the hunt for Apple business.

Competition is what this business is all about. Anyone that thinks Apple can leave Samsung high and dry also believes in the tooth fairy. At the same time a dual supplier strategy is a must for everyone.

As for Apple buying and operating a fab, that’s outrageous. One would only have to look at what they have done with most of the other manufacturing, it’s outsourced. Sure they do invest in some of their suppliers. Its common practice when you want it special and guaranteed access to capacity.

“Jump Ship,” now way…..

2/16/2011 2:58 PM EST

Perhaps Apple is different. They already have substantial vertical integration, from architecture, apps to chip design. Probably fab is next in line. Perhaps Steve Jobs sees threat emanating from Samsung which draws its strength from vertical integration.

2/16/2011 3:59 PM EST

Samsung is a friend and foe to Apple. Thus Apple has to win consumers over innovations not semiconductor components. Japanese were good at components but fail to promote beyond that. TSMC is a natural second source to Samsung on A4/5. Sadly there is no one else out there for Apple except Samsung and TSMC. Apple knows about this.

2/16/2011 4:11 PM EST

Agreed.... this is a love hate relationship. One cannot make long term plans without a second source. This is especially true for something as IP, knowhow and capital intensive as a state of the art semiconductor logic manufacturing facility with 80,000 WPM capacity.

To those that feel Apple needs its own fab I point to the history of Commodore, Digital Equipment, Data General, Sperry Univac etc. and let history speak for itself

2/16/2011 5:04 PM EST

Apple is known to have received special treatment form suppliers both in terms of prices and supplies. It will be interesting to know, if Apple switch to TSMC, how and whether will TSMC differentiate among similar customers.

2/16/2011 5:16 PM EST

Himanshu, For special treatment, Apple's volume speaks for itself. IT's not SWITCH to TSMC, but ADD additional capacity. It's publicly known that Samsung ran out of capacity on 45nm for A4. Thus Apple can't rely on single source but other foundries can't provide the capacity Apple needs either except TSMC. That's the reality of the industry today.

2/16/2011 5:50 PM EST

Maybe Apple is taking a page from Qualcomm. Initially, Qualcomm is doing 28-nm cell-phone chips, reportedly without high-k due to the risks involved. At first, Qualcomm is going with TSMC, which offers a 28-nm process without high-k. IBM's ''fab club'' (Samsung, Globalfoundries) will offer 28-/32-nm processes--with only high-k. Perhaps Apple doesn't want to take the risk with high-k at 28-nm. It's a wild theory. Thoughts?

2/16/2011 8:18 PM EST

You’re reading and making more of this than it is. It's a decision on second source. That means it's about how to protect the business at the lowest expense possible.

This is not a technology issue it’s a business issue

2/17/2011 12:21 AM EST

With the advent of 3D chips and integrating most the system functionlaity into one or two chips, Apple may be looking for introdcuing novel techniques. When they do this, they may not like to divulge much information to Samsung. TSMC may be better alternate.

3/7/2011 9:24 PM EST

They should have done it before