Without a partnership with Apple, TSMC couldn't be the world's top foundry

by Lee Ki Kasumi

TSMC, which has the largest share in the industry in Taiwan's foundry (semiconductor manufacturing company), undertakes the manufacture of Apple's chips that sell iPhones and iPads. Pushkar Ranade, Senior Chief Engineer, Architecture, Graphics and Software, Intel, explains the partnership between Apple and TSMC.

The Apple-TSMC Partnership-by Pushkar Ranade
https://semiconductor.substack.com/p/the-apple-tsmc-partnership

Intel has long held a market share in the semiconductor manufacturing industry. Intel worked with Microsoft to design and mass-produce CPUs for Windows PCs. By securing and producing large quantities of silicon wafers, Intel has been a leader in the industry as a semiconductor manufacturer for over 40 years, increasing yields and profitability, Ranade said. The performance of CPUs for PCs is shown using frequency (clock speed) as an index, and anyway, excellent performance is required at high frequencies.

However, with the advent of chips for mobile devices such as smartphones and laptops, not only high performance but also high power efficiency is required. Under such circumstances, unlike Intel, TSMC focused on producing chips for mobile devices.

Apple wasn't a TSMC customer for the first few years of the iPhone, initially using Samsung to make its main chips. Apple made a full-scale partnership with TSMC in 2014, and the 20nm process adoption SoC ' A8 ' installed in the iPhone 6 and 4th generation iPad mini announced in the fall of the same year will be produced at the TSMC node. I have. Since 2014, TSMC has been producing not only Apple-designed chips, but also Qualcomm and Broadcomm chips and sensors for Apple products.

Since the shipment of the A7, Apple has been a major customer of TSMC's advanced technology nodes. Apple has adopted a 3nm process in the design of its proprietary 5G modem chip, and TSMC is reportedly ready to produce on N3 nodes.

Reported that TSMC has entered mass production system by 3nm process, will 2nm process be deployed around 2025 --GIGAZINE

'TSMC has benefited significantly from the wave of mobilization and has seen significant revenue growth since becoming responsible for Apple's SoC manufacturing in 2014. Since 2015, Apple's TSMC Increasing revenue contributions on a dollar and percentage basis. In 2020, Apple is expected to contribute up to $ 11 billion, or about 25% of TSMC's total revenue. ' I am.

Since Apple announces a new iPhone model every fall, TSMC is now able to recover 50% of its annual recurring profit in just six months to nine months. Thanks to Apple, TSMC is able to recover its node investment at an overwhelming rate, enabling further capital investment. 'Since we partnered with Apple, TSMC has been able to continue investing in the development of cutting-edge nodes. Ability and quantitative demand to be a lead adapter for new technology nodes outside of Apple. Intel is the only company that has both. '

In 2017, three years after the release of A8, TSMC celebrated its 30th anniversary. Apple's COO Jeff Williams was invited as a guest at this commemorative event. The photos below were taken at the event. On the far left is Jeff Williams COO, and on the far right is Morris Chang , the founder of TSMC. The man wearing the second leather jacket from the right is NVIDIA CEO Jensen Huang.

At the event, COO Williams said, 'The first seed of the Apple-TSMC partnership was actually sown in 2010. I ate in Taiwan with Mr. and Mrs. Chan. I wasn't doing business with TSMC, but I had a very good talk, and when it came to talking about what we could do together, there was great potential if we could combine cutting-edge technology with our aspirations. I found out that there is. '

According to Williams COO, Apple has signed a contract to procure 100% of iPhone and iPad chips from TSMC, and TSMC will send $ 9 billion (about 1.1 trillion) to its factory in Tainan to meet the contract with Apple. It has invested (yen) and has set up a system so that 6,000 employees can produce chips 24 hours a day. As a result, TSMC is now able to ship more than 500 million chips to Apple.

COO Williams said, 'TSMC has invested $ 25 billion so far, of which $ 9 billion has been invested in Apple. A bet to invest $ 9 billion in one company. No other company will do it. '

In addition, COO Williams said, 'The challenge for the next decade is not'whether (the chip) has enough processing power to meet our ambitions', but'with the right ambition to use this technology.' We are not concerned about the slowdown in the semiconductor industry. That's not the case. We think it's very likely that the semiconductor industry won't slow down. '

'Mass production of high-speed, high-performance products with advanced nodes like the chips in Apple's iPhone is very important for TSMC to stabilize the most complex and advanced nodes,' Ranade said. With the production of Apple products, TSMC's manufacturability has improved rapidly, and it is now possible to serve customers who demand advanced nodes such as NVIDIA and AMD. If Apple did not order from TSMC in large quantities, TSMC Would not have been able to catch up with Intel in the manufacture of advanced node semiconductors. '