Apple has signed a deal with Taiwan Semiconductor Manufacturing Co. to make some of its chips starting in 2014, marking a partial crack in Apple’s relationship with Samsung Electronics Co., an Apple supplier that is increasingly its rival in technology products, the Wall Street Journal reported this weekend.
The report, which the newspaper attributed to a TSMC executive, has potential significance for Clark County. TSMC is parent corporation to WaferTech, which has an older-generation chip manufacturing plant in Camas as well as an abundance of land suitable for developing a second chip plant. TSMC has said it is looking for a site for a new plant and has not ruled Camas out as a potential site.
The reported Apple deal would seem to ramp up the need for new capacity sooner rather than later.
Camas Mayor Scott Higgins said he continues to hold out hope that TSMC will choose to expand in Camas rather than in Taiwan or elsewhere in the world. “I wish we were in their boardroom and knew what they were doing,” he said in response to the Wall Street Journal article. “The bottom line is, this is good news for TSMC and hopefully great news for Camas.”
Camas remains committed to accommodating TSMC’s growth by bolstering its sewer infrastructure, Higgins said. The city talks to the company about once a month, the mayor said, but it has not yet heard anything definitive about its plans.
Higgins said it’s realistic to assume TSMC could ink a deal to build a new fabrication facility — in Camas or elsewhere — as early as 18 months from now. But it could take as long as three years, he added.
The present WaferTech fabrication plan, which produces older-generation 200-millimeter chips, employs about 1,000 workers. The industry’s state of the art is currently the 300-millimeter wafer and a new plant would likely produce next-generation 450-millimeter chips.
Earlier this year, Higgins said an expansion at WaferTech would be “a game changer,” involving a huge capital investment and at least 1,000 more jobs.
The Wall Street Journal quoted unnamed TSMC officials as confirming Apple recently signed a deal with TSMC after years of technical delays due to glitches that prevented the chips from meeting Apple’s speed and power standards. Samsung, however, will remain Apple’s primary supplier through next year, one of those executives told the newspaper.
A separate Journal blog quotes an industry analyst’s estimate that orders from Apple will account for about 8 percent of TSMC’s total revenue in 2014 if all goes according to schedule. That could rise to 15 percent of the company’s revenue by 2015 if Apple buys 60 percent of the chips it needs from TSMC, analyst Randy Abrams of Credit Suisse told the Wall Street Journal.
TSMC has 10 production plants in Taiwan and one each in Singapore and Shanghai, in addition to the WaferTech plant in Camas.