Qualcomm is looking to shift some of its mobile application processor orders from Taiwan Semiconductor Manufacturing Company (TSMC) to other foundry services providers, according to industry sources. The move is to strengthen the fabless chipmaker's cost and price competitiveness, which would help it maintain and grow its market share in China and other emerging markets, said the sources.
Qualcomm has been among TSMC's biggest clients, placing orders of about 170 million mobile APs every quarter, the sources indicated. Shifting a portion of the orders to other foundry houses will have a negative impact on TSMC's performance, the sources said.
Neither TSMC nor Qualcomm was available for comment at the time of publication.
Rumors already circulated earlier in 2012 when TSMC had trouble meeting all orders of 28nm chips. TSMC's inability to supply enough chips made using 28nm process technology reportedly drove its major clients including Qualcomm toward other foundries such as Globalfoundries as a second sources.
However, Qualcomm and other customers actually decided to queue up for TSMC's 28nm production capacity, as other foundries were unable to improve their yields on 28nm processes, the sources pointed out. Later in 2012, TSMC was ahead of its rivals to ramp up production of 28nm chips.
Having improved its yields for 28nm products for about one year, Globalfoundries is able to lower its prices significantly and even offer more attractive quotes than TSMC's, the sources noted.
Qualcomm, encountering fierce price competition from Greater China-based IC design firms including MediaTek, Spreadtrum and RDA, is mulling bringing its production costs down by transferring some of its 28nm chip orders from TSMC to other foundries that now provide cheaper quotes, the sources indicated.
Article translated by Jessie Shen
