Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest independent semiconductor producer, recently turned down lucrative offers from both Apple and Qualcomm to become each company’s exclusive semiconductor provider, Bloomberg reported Wednesday. Both Apple and Qualcomm offered investments and cash totaling more than US$1 billion to secure the rights for exclusive access to chips for their mobile devices.
Apple’s souring relationship with Samsung, which currently provides semiconductors for use in iPhones and iPads, likely drove the Cupertino company to investigate alternative sources for its supply chain.
TSMC, which currently supplies components to Qualcomm, Broadcom, nVidia, and other electronics companies turned down both offers so that the company could maintain the flexibility to work with multiple customers as product popularity changes each year, sources familiar with the matter told Bloomberg. TSMC is also situated well financially and doesn’t have an urgent need for the cash infusion that a deal with a large company like Apple would provide.
Despite a reluctance to partner exclusively with one electronics company, TSMC Chairman Morris Chang told investors in July that the company would be willing to devote one or two of its seven fabrication facilities to a single customer.
Even with a relatively limited arrangement for a dedicated facility, TSMC is aware that there are still risks as the mobile device market continues to evolve. “You have to be careful. Once that product migrates, what are [we] going to do with that dedicated fab?” said Lora Ho, TSMC’s Chief Financial Officer. “We would like to keep the flexibility.”
In typical fashion, neither Apple nor Qualcomm are commenting publicly on the matter and, as Ars Technica points out, it is uncertain if both companies bid competitively or if they worked together to ensure that TSMC would produce Qualcomm chips for exclusive use in Apple devices.
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