TSMC To Build $3 Billion Chip Plant in China – Rumored to Produce A10 Processor

Posted by at 6:45 pm on December 7, 2015


TSMC is planning to construct a new processor manufacturing facility in China, one that is estimated to be worth around $3 billion to construct. At the same time, rumors are circulating that Apple may end up having a considerable order from Apple in the near future, with a report suggesting Apple may simply hand complete control of its processor manufacturing over to TSMC, starting from the A10 processor expected to ship next year in a future iPhone.

A press release spotted by the New York Times advises of the submission of an application for the factory, which will involve the creation of a 12-inch wafer manufacturing facility and design service center in Nanjing, China. Submitted to the Investment Commission of Taiwan’s Ministry of Economic Affairs, the plans suggest the plant will create 20,000 12-inch wafers per month, with volume production based on a 16nm process to start in the second half of 2018.

“In view of the rapid growth of the Chinese semiconductor market,” TSMC Chairman Dr Morris Chang claims the plant will “provide closer support to our customers there and to further expand our business opportunities.”

Despite costing $3 billion, TSMC aims to save money by using equipment from its Taiwan facilities at the new plant, as well as capitalizing on Chinese subsidies for its production. The facility itself is also likely to save it money in the long run, by helping it protect it proprietary information instead of providing it to a third party, leaving it potentially open to theft and use elsewhere.

While the plant may take a considerable amount of time to start production of chips, TSMC may already be benefiting from increased chip orders. A report from HSBC analysts supplied to AppleInsider suggests that the 60 to 70 percent production share of A9 chips enjoyed by Samsung may change, with TSMC’s between 30 and 40 percent production share potentially increasing for the next chip. A8 production was handled mostly by TSMC, and it is also the manufacturer of the A9X.

It is suggested Apple may become the first TSMC customer to use its integrated fan-out packaging in mass production, which stacks chips and mounts them directly onto the circuit board instead of a substrate, reducing the thickness and overall weight. Such a deal could give TSMC an extra $300 million in sales for next year, and up to $1 billion in 2017, with the overall revenue from A10 production potentially hitting between $2.2 billion and $2.5 billion.

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