Apple Bid to Secure Exclusive iOS Chips Deal with TSMC Denied

Apple has recently been on the hunt for a new chipmaker. Currently, Samsung supplies the company’s A-series mobile device chips. Ever since the results of the US battle royale between the two tech companies, it is possible that Apple is doing what it can to keep away from its frienemy.

Unfortunately for the iPad maker, a bid to contract Taiwan Semiconductor Manufacturing Co. (TSMC) for dedicated production was recently turned down, leaving Apple holding hands with Samsung again.

According to Bloomberg, Apple and another major tech company, Qualcomm, were trying to woo TSMC into an exclusivity deal. Both offered the chipmaker more than $1 billion to set aside production dedicated to making chips exclusively for them.

As mobile devices are becoming more popular, Apple, Qualcomm, Broadcom, Nvidia and others are scrambling to secure supplies before they run out. Apple is probably trying to create an infrastructure to support the demand for both the iPad and the iPhone without fear of parts shortages.

Qualcomm Chief Executive Officer Paul Jacobs said in June that he was “willing to write big checks” to improve supply shortages that have held back earnings and growth.

TSMC turned down both Apple and Qualcomm’s offer. The reason is unknown, but the company has said before that it wants to stay flexible enough to be able to switch between customers and products. Chief Financial Officer Lora Ho told Bloomberg in a July 19 interview that TSMC wants to retain control of its plants and doesn’t want to sell part of itself, nor does it need cash for investments.

TSMC also doesn’t want to be forced into making one specific chip. “Dedicating a facility to a single product or customer creates the risk of a fabrication plant becoming a burden if the product, client, or technology changes,” said Ho.

For now, Apple will have to stick with Samsung. Hopefully, the Korean-based company doesn’t feel too scorned and will continue an amicable relationship with its rival.

email

About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik