It would be strange twist of fate, maybe instead of paying apple 1 billion Samsung will be asked to invest 1billion into apple dedicated fab. not like apple needs extra billion cash as world most rich company. But I guess apple will ask to glofo before then
Well what's a billion dollars or two between friends?
It is strange that Morris Chang should let slip that dedicated company fabs or lines might be appropriate but then turns down such offers.
TSMC has worked hard to become a leading supplier of high-performance silicon and was prepared to invest many billions of dollars when others were not. It would be quite natural that now it has the industry over a barrel it wants "full meausure" for its manufacturing services.
Qualcomm and Apple would come in demanding a dedicated fab, negotiated operating margins and capacity then when the fab is no longer bleeding-edge, want another fab leaving TSMC holding the bag on deprecation. Qualcomm has done this in subcon test and packaging for years. Why should TSMC give up control over how to run capacity and invest $$. Apple and Qualcomm should build there own fabs and license processes. A large bleeding edge fab cost 10 billion. fab 15 is a $10 billion project. more large fab in planning (power chip land purchase) $1 billion is a joke.
this is just the first round of negotiations. if apple and qcom capitalize fabs and license processes and pay tsmc to manage fabs, maybe. tsmc needs to extract a lot more $$ for their goodies. why risk deprecation on dedicated fabs. that's just crazy talk.
It seems obvious that Apple should setup their own Fab in order to solve long term dependencies. The easiest way is for Apple would be to join Common Platform and to invest $6B-$B into the Manufacturing Facilities.
Well, Apple is obviously already designed-in to the "common platform", yet it seems that only Samsung is able to actually yield the part.
I think it's definitely cheaper for Apple to either "foundry" the part or form a partnership, but who in their right mind would partner with Apple?
Why Apple need TSMC, which is already overbooked to capacity. With the kind of cash Apple has and the kind of business model Apple follow, it can put its money in other fab companies and reap the benefits for years to come.
Does this means there aren't enough fabs in the world now? Perhaps talking about 28nm there aren't.
Who will open the next one and seize this business opportunity?
We're seeing moves which aren't the everyday buy and sell thing. Patents litigation and now offerings for guaranteed production? What does all this mean? Seems we're in a mobility boom!
It's not that there are not enough fabs or money. It's technology know-hows and yielding. 28/20nm and advanced technologies are getting harder and harder to get yield up to achieve the level of economics and only TSMC, Intel and Samsung are able to demonstrate that right moment.
While TSMC was right in rejecting the offer I still feel they could have negotiated an alternate way to resolve this shortage. TSMC is reducing its silicon forecast one hand and turning the other side when the customers come asking. Or is it that their 28nm node is still not up to the mark. The smaller foundries are still long way behind as compared to TSMC and cannot offer the same economies of scale, perhaps big A should checkout the IBM shoppe.
QCOM has contracts with TSMC, UMC and Samsung already and now they are exploring contracts with GloFo and SMIC? Why now?? Why not earlier?? Maybe Apple will follow suit - Samsung, TSMC first then UMC then GloFo then SMIC....
I assume 2 reasons that TSMC reject APPLE & QCOM
1. In 1996, UMC co-build 5 8inch fab with 5 different customers, but merged back in 2000 due to these fab utilization were slow down.
2. If TSMC agrees, how TSMC rejects other design house and IDM as a pure play foundry?
My ides is maybe TSMC should follow ASML's strategy to let Apple and QCOM become as stockholders for their first priority wafers foundry.
I feel we are all missing a key point here.....As far as we know....Apple and Qualcomm came to TSMC offering to INVEST in TSMC in return for special access to leading-edge capacity.
The key word is invest....in other words Apple and Qualcomm wanted a minority stake in TSMC which they could of course sell at a later date.......as a sort of surety.
I suspect Morris Chang just said: "No you dont get a piece of the company. Just give us your money and we'll let you know when your chips are ready."
TSMC is one of biggest and most recognized company in Taiwan. It's more than just business and economy. It's national pride. The Taiwan government will not allow TSMC's business decision is influenced by foreign company.
Stanley_, you make a lot of sense! I wonder why TSMC would need the money offered by Apple/Qualcomm when they can just sell them chips. TSMC is in the drivers set here and they get to steer their own course, everyone else is going to have to get onboard for the ride..
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