TSMC Doesn't Want Apple, Qualcomm's Money for VIP Chip Access
August 29, 2012 1:30 PM
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Apple and Qualcomm placed separate bids valued at over $1 billion each as an investment with Taiwan Semiconductor Manufacturing Co.
In an attempt to boost their positions in today's smartphone race, both Apple and Qualcomm tried to invest in Taiwan Semiconductor Manufacturing Co. (TSMC) for their very own factories -- but both failed.
Apple and Qualcomm placed separate bids valued at over $1 billion each as an investment with TSMC in hopes of acquiring VIP access to the
maker's supply. However, it looks like TSMC isn't taking the bait.
For Apple, the aim is to have an
alternative to Samsung
as its chip supplier. This will boost production of iPhones and iPads, and it also wouldn't hurt to have another supplier that isn't its direct competition when it comes to smartphone hardware.
Apple also recently burned Samsung in court
after a U.S. jury decided that Samsung stole iPhone/iPad patents for the use of its own products, resulting in a $1.05 billion fine and upcoming Samsung product bans. So maybe finding alternatives to Samsung for iDevice chip-making wouldn't be a bad idea.
, it's simply looking to boost supply since there have been recent shortages that are affecting its financial reports.
Clearly, either could benefit from having exclusive access to TSMC, where the chip maker would dedicate a facility for the production of chips for only Apple or Qualcomm. Many chip makers today can't produce the large quantities needed to keep up with demand, hence the interest in TSMC.
But TSMC doesn't need Apple or Qualcomm's large, cash investments; it's successful because it has multiple customers (meaning, it doesn't want to give its services to either Apple or Qualcomm alone). It would rather stay flexible instead of putting all of its eggs in one basket.
"You have to be careful," said Lora Ho," chief financial officer at TSMC. "Once that product migrates, what are you going to do with the dedicated fab [fabrication plant]? We would like to keep the flexibility."
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8/30/2012 10:56:19 AM
It was NO sweet deal!. The contract probably was so constricting, it makes a Boa constrictor looks like a stick!. That money comes with conditions way too risky for TSMC to handle. Those Taiwanese are very shrewd business people and they know contracts and have worked with the main players before, so they are no "spring chicken". They will take a good deal when they see one. This particular one ain't it!. Plain and simple.
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