Has the Semiconductor Industry Gone Mad?

The weather in Taiwan last week was very strange. It was so cold I tried to turn on the heat in my hotel room only to find out it was not possible. If you want more heat they bring a portable heater because who needs central heat in Hsinchu? Even stranger is all of the media hyperbole on the next process nodes:

Intel CFO: We're so far ahead that Apple has no choice but to work with us

What he actually said is that Intel is so far ahead of the competition when it comes to PC processors that Apple (and just about every other PC maker) has no choice but to use Intel chips. True as that may be I’m not sure reminding everyone that you have a monopoly on the PC business is such a great idea. In regards to Apple it is hard to tell what they will do for semiconductors. At one time the media thought that Apple would no longer do business with their competitor (Samsung) after successfully moving to TSMC at 20nm. Now the media has “affirmed” that Apple is using Samsung 14nm exclusively for the iPhone and iPad this year:

Apple affirmed to return to Samsung for 14nm 'A9' chips for next iPhones, iPads

As I have said before, no one likes a monopoly so I find it highly unlikely that Apple will use just one foundry if at all possible moving forward. Given that they make two different chips, one for the iPhone and a larger more powerful one for the iPad, it makes using two foundries that much easier. You should also know that Samsung 14nm is LP (low power) while TSMC 16nm FF+ has a higher performance range so making the A9 at Samsung and the A9x at TSMC is much more believable.

The other thing you should ask yourself is why did Samsung and GlobalFoundries REALLY do the 14nm licensing deal last year? The answer is because customers “suggested” they do so. And by customers I mean the two largest wafer customers which are Apple and Qualcomm of course. I remember Paul McLellan and I being briefed on this last Spring and me thinking to myself, "Has the semiconductor industry gone completely mad?"

Samsung ♥ GLOBALFOUNDRIES

In a recent conference call TSMC called GlobalFoundries “Samsung’s accessory” which was funny but it also has a much deeper meaning. Given the choice of a single manufacturing source for a specific process node or a source with an “accessory” Apple or Qualcomm will chose the latter, which is what they have done at 14nm. There have been no announcements as to whether Samsung and GlobalFoundries will again work together (copy exact) on 10nm but if Apple and QCOM say so they will, absolutely. You have to follow the money trail in the fabless semiconductor ecosystem for sure.

The other question I asked myself at the end of this trip was: "Self, how long until UMC becomes TSMC’s accessory?" And if this trend catches on who will be Intel’s foundry accessory?