Rumor: This Chipmaker Wants to Produce Apple’s A9 Processor

computer manufacturing production chip (640x426)

New rumors from Apple’s (NASDAQ:AAPL) overseas supply chain suggest that competition for the Cupertino, California-based company’s A9 processor orders is already heating up. According to unnamed “industry sources” cited by DigiTimes, Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) will likely be adding “two more advanced processes to its 16nm process portfolio in order to compete with the 14nm nodes to be released by Intel and Samsung.”

Apple’s iPhone 5S, iPad Air, and iPad mini with Retina display all use the A7 processor with 64-bit architecture. Despite ongoing rumors that Apple has been attempting to reduce its reliance on Samsung (SSNLF.PK) for components, an unnamed Samsung official cited by ZDNet Korea earlier this month said that the Korea-based company had already signed a contract to produce the upcoming system-on-chip tentatively called the A8. ZDNet Korea’s source contradicted a previous report from Taiwan’s Commercial Times that suggested the production of Apple’s new A8 chip might be handed over to Taiwan Semiconductor Manufacturing Co. Now it appears that Taiwan Semiconductor Manufacturing Co. is focusing its efforts on securing Apple’s A9 chip orders.

“According to TSMC’s original roadmap, the 16nm FinFET process is expected to enter trial production at the end of 2014,” according to DigiTimes’ sources. “But TSMC now plans to release a 16nm FinFET+ process also at the end of 2014 and a more advanced 16nm FinFETprocess in 2015-2016.” If the 16nm FinFET+ process begins volume production by early 2015, it may help Taiwan Semiconductor Manufacturing Co. win A9 processor orders from Apple, per DigiTimes’ sources. “FinFET” refers to the architecture design of the transistors.

Although Taiwan Semiconductor Manufacturing Co. is implementing a more advanced chip manufacturing process, the company may still not be able to win A9 chip orders from Apple. In September, Korea Economic Daily reported that Taiwan Semiconductor Manufacturing Co. lost A8 chip orders from Apple after struggling with yield issues due to issues with another complex fabrication process. The company will likely face similar obstacles with its upcoming trial production run.

It should be noted that DigiTimes has previously reported inaccurate rumors about Apple shifting chip production to Taiwan Semiconductor Manufacturing Co. Apple has continued to use Samsung as its primary chip supplier even though the company is also Apple’s biggest rival in the worldwide smartphone market. Apple and Samsung will face each other in U.S. District Court for the Northern District of California on Monday to settle allegations of patent infringement made by both companies.

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