TSMC Chairman and CEO Morris Chang has indicated that the company achieved close to 100% market share on its 28nm chip process and should continue to succeed as wafer shipments triple this year, prompting market watchers to predict a crucial deal with Apple for its A series processors, China Times reports.
Chang said the company plans to invest $9 billion in capital expenditures this year, and will likely spend even more in 2014.
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In 2012, 28nm chips accounted for about 12% of TSMC’s revenues, or $2.1 billion (NT$61.5 billion). Chang expects that figure to soar to $6.2 billion (NT$180 billion). The company recently posted fourth quarter revenues of $4.5 billion (NT$131 billion) and net income of $1.4 billion (NT$41.5 billion).
Chang also suggested that TSMC’s success with the 28nm process has lead to a near monopoly.
“We have enjoyed throughout the year, in spite of a lot of attempts at competition, close to 100% foundry market share in 28nm technology,” he said.
According to China Times, Chang’s comments led analysts in attendance to believe that TSMC has secured orders from Apple for its upcoming A series processors. Apple’s A6X chip is currently produced on a 32nm process by Samsung, but a reduction to 28nm could result in power savings and improved performance for future devices.
Reports that Apple would move away from Samsung, which is also one of its fiercest competitors in addition to being a manufacturing partner, to TSMC have persisted for years, but they have been gaining momentum as of late. Earlier this month, China Times claimed TSMC had begun trial production of a 28nm A6X processor.
Aside from Apple, TSMC has also won orders for chips from other companies. AMD recently confirmed that its 28nm Kabini and Temash APUs will be produced by TSMC after having cancelled a different set of processors scheduled to be built by rival GlobalFoundries.
Looking farther ahead, rumors have suggested that Apple could tap TSMC for a future A series processor produced on the 20nm process.
TSMC is investing part of its capital expense funds in its 20nm production line, and Chang says customer interest in 20nm has been strong. He expects full production to ramp up in 2014 and 2015 even more quickly than 28nm has.
“Enough discussions have taken place with enough customers with large requirements to lead us to believe that in both its first and second year of 20nm SoC production (2014-2015), the volume of 20nm SoCs would be larger than 28nm in its first and second years of production (2012-2013),” he said.
Meanwhile, Samsung is working to build out its own 28nm production processes. For instance, upgrades to its Austin factory should add 28nm capability in the second half of this year. The company also has plans to finish building 20nm and 14nm lines by the end of this year, though it may choose to focus on its own Exynos mobile processors. Of course, if Apple does end up moving its orders over to TSMC, Samsung might not have much of a choice in the matter.
Update: Added direct quotes from TSMC’s webcast for clarification. BrightWire’s original paraphrase of the original China Times article suggests the 100% market share is a forecast, but Chang’s figures are actually for 2012.
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