Apple & Qualcomm Offer TSMC $1 Billion+ Bids for Exclusivity; TSMC Declines

[dgstorm]

Apparently, both Apple and Qualcomm both offered bonus deals of over $1 Billion dollars to TSMC in order for the manufacturer to reserve exclusive capacity for the foundry to build their chips. Apparently, TSMC builds the 28nm Snapdragon S4 line of chips for Qualcomm, and they wanted to insure their market capacity. Apple courted TSMC because they are likely looking to distance themselves as much as possible from Samsung despite assurances from Samsung that they will not let the court outcome affect their production of Apple chips.

Even though both of these companies offered TSMC huge b̶r̶i̶b̶e̶s̶ investments, the chairman and CEO of TSMC, Morris Chang, declined both offers. Apparently, TSMC wants to keep their production more flexible to switch its production between customers and products, just in case some new disruptive tech comes along.

Chief Financial Officer Lora Ho said in an interview on July 19, that (paraphrased) TSMC wants to retain control of its plants, doesn’t want to sell part of itself and doesn’t need cash for investments. Here's a quote with the wrap-up,

Dedicating one 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. “You have to be careful. Once that product migrates, what are [we] going to do with that dedicated fab?” said Ho. “We would like to keep the flexibility.”

Wise move.

Source: AndroidTablets.net via Bloomberg

 

[combatmedic870]

Good.

 

[Narsil]

...Even though both of these companies offered TSMC huge b̶r̶i̶b̶e̶s̶ investments, the chairman and CEO of TSMC, Morris Chang, declined both offers. Apparently, TSMC wants to keep their production more flexible to switch its production between customers and products, just in case some new disruptive tech comes along...

Morris Chang's using it.

 

[armeddroid]

LOL @ APPLE

You have been D.E.N.I.E.D.

 

[kodiak799]

Watch next week's news be about Apple buying the whole plant

 

[cybertec69]

Apple knows what will be coming "retribution", so they are trying to brace themselves from the inevitable, and at the same time trying to monopolize the market, TSMC is not falling for it, they do not need Apple or anyone else including Qualcomm.

 

[MissionImprobable]

Things just keep getting worse for Apple the more they try to act like they are the only game in town. This is like the former A-lister being told he'll need to make an appointment for XYZ just like everyone else. TSMC is Cartman and Apple is Scott Tenorman.

 

[johnomaz]

I loved reading that! In other words, Apple can't monopolize the supply of the chips and essentially shut out other manufacturers from the chips. I remember when they did that for the LCD displays and no one could keep up with the demand because apple had all the parts.

 

[The Robot Cow]

Yes!!! I'm glad they denied Apple. DancingNexus

 

[Valvoline]

Once again Apple trying to buy tech not invent it. Innovation uhuh

 

[jroc]

Watch next week's news be about Apple buying the whole plant

This made me lol....literally. I wouldnt be surprised if it happened. But this is a smart move by Mr Chang, TSMC.

 

[liftedplane]

Watch next week's news be about Apple buying the whole plant

I wonder how much it would cost apple, if he said no to 1 billion it would have to be over 10 billion to buy the plant.

watch next week apple will SUE TSMC for patent infringement.

 

[kodiak799]

I wonder how much it would cost apple, if he said no to 1 billion it would have to be over 10 billion to buy the plant.

watch next week apple will SUE TSMC for patent infringement.

No idea really. Could be nothing more than a negotiating ploy to get a little more money out of both Qualcomm and Apple. We also have no idea what sort of profitability is involved - you might get $1B from Apple that is pure profit, but make nothing (even lose a bit) on producing...and if they monopolize your whole plant?

$10B+ seems like an enormous amount of money for one plant (safe bet on a multiple, but I assume that $1B exclusivity covered 5 years or more). Really my point was simply that if Apple is that concerned about capacity, they could easily buy the whole thing "name your price" sort of deal. And the whole thing really does sound like posturing on the part of TSMC CEO.

 

[MissionImprobable]

I agree with the decision though: the tech market evolves too quickly to be saddled to one company. Imagine if you'd had a five year deal with RIM starting in 2007 where that would have put your company at this point. :happy3:

 

[jroc]

I agree with the decision though: the tech market evolves too quickly to be saddled to one company. Imagine if you'd had a five year deal with RIM starting in 2007 where that would have put your company at this point. :happy3:

This is a good point. In 2007....Rim was at the top or near the top and woulda been seen like a good thing to do at the time. Enter the iPhone......then enter Android.