At the recent Global Technology Conference, hosted in Silicon Valley by Global Foundries, much of the talk was about the 28nm manufacturing process, which is the focus for the next year or two of not just the mobile SoC space, but the GPU market too.
Conversation among the tech hacks over the dinner table inevitably tended towards Apple, and what its plans are. Since Apple became so successful, its activities have started to have significant knock-on effects to the rest of the industry. This is because Apple buys components, such as chips, storage and displays, in very large quantities, which enables it to drive hard bargains with suppliers.
So when Apple decides to shift suppliers, as it's supposedly doing with the manufacture of its own SoCs - from Samsung to TSMC - there are bound to be ripples. One of the hacks at the GF event was Charlie Demerjian of Semi Accurate, who has had his fair share of semiconductor industry scoops over the years. So it intrigued us to see his recent exclusive claiming TSMC has raised the prices on its 28nm wafers for AMD and NVIDIA.
While AMD gets its CPU manufacturing done by Global Foundries, of course, the GPU side is still done by TSMC, for now. NVIDIA, to the best of our knowledge, contacts all its chip manufacture to TSMC. But Apple is probably the biggest fab customer of all these days, and you can bet TSMC did everything it could to secure Apple's business. But at what cost to the rest of its customers.
Even a fab company as big as TSMC has finite capacity, and assuming it didn't have a ton of 28nm equipment sitting idle before Apple came knocking, it stands to reason that some other customers will have to move down the pecking order if Apple is now at the top of the 28nm list. When the rumours of Apple leaving Samsung first appeared we figured GF was the more obvious move, but something seems to have persuaded Apple otherwise.
So Demerjian proposes that TSMC is now in the luxurious position of being to raise the prices for AMD and NVIDIA, reasoning that it will either solve its Apple-induced capacity issues by forcing them to go elsewhere, or make sufficient extra cash from them to make the hassle worthwhile.
There are several potential consequences of this news, if true. Firstly AMD and NVIDIA will have to either charge more for their 28nm GPUs, or lose a lot of their profit, secondly GF may well benefit as one of the only alternative fabs, and thirdly we might see a shortage of, not just 28nm GPUs, but SoCs too.
Let's not forget that all NVIDIA's Tegra manufacture currently happens at TSMC, and we expect that to move to 28nm soon. Qualcomm is also a major TSMC customer and hopes to get its first 28nm Snapdragons out of the door early next year. And then there's TI, which expects to be one of the first companies to produce an SoC based on ARM's 28nm Cortex A15 design, also next year. Something's got to give, and it's unlikely to be Apple.