TSMC to Remain Apple's Sole Supplier of A-Series Chips, Manufacture ARM-Based Processors for Mac Starting in 2020 [Report]

TSMC is set to remain Apple's sole supplier of A-series chips going through 2019 and 2020, according to a new report from TF Securities analyst Ming-Chi Kuo via MacRumors.

Apple is expected to use A13 and A14 chips in its future generation iPhones. The company has become increasingly dependent on TSMC due to its 'superior design and production' capabilities. Additionally, unlike Samsung, TSMC does not compete with Apple in other markets.

Kuo believes that TSMC will manufacture Apple-designed ARM-based processors for Mac beginning in 2020 or 2021. It's been widely rumored that Apple is planning to transition away from Intel to its own chips. The initiative is reportedly codenamed Kalamata and comes as part of a larger strategy to make all of Apple's devices work seamlessly together. The transition would also give Apple more control over design design, better profits, and fewer delays due to manufacturing issues.


We also expect that Mac models will adopt Apple's in-house-designed processor starting 2020 or 2021, which will create four advantages for Apple: (1) Apple could control everything about the Mac's design and production and be rid of negative impacts from Intel's processor shipment schedule changes. (2) Better profits thanks to lower processor cost. (3) Mac market share gain if Apple lowers the price. (4) It could differentiate Mac from peers' products.

Notably, Kuo also predicts that Apple will use TSMC to manufacture chips for an upcoming Apple Car starting in 2023 - 2025. The analyst believes that Apple has revived work on a full vehicle after the project hit some road bumps.

We believe that Apple Car's Advanced Driver Assistance Systems (ADAS) will support either Level 4 (high automation) or Level 5 (full automation). Only TSMC's 3/5 nm process can meet Level 4 and Level 5 chip requirements.

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