The semiconductor industry is screaming, as TSMC underestimated the demand for its 28 nanometer nodes. The company is now considering changing its business models to be able to meet with the needs of individual clients.
Qualcomm and Nvidia are two comapnies that have openly criticized TSMC for not being able to satisfy their needs. The companies are two of TSMC’s most important clients, but have been looking elsewhere for manufacturing and Qualcomm has secured its supply with a total of four different manufacturing partners. For Qualcomm the lack of capacity with TSMC has affected sales and growth, but also the almost one year advantage it had with its Snapdragon S4 processors.
During the latest analyst conference call, CEO and chairman Morris Chang, told participants they are considering building fabs dedicated to individual clients. This is a different route than today, where TSMC tries to meet the demands of hundreds of clients in the same product lane. Building and manufacturing in fabs are becoming exponentially more expensive, which makes more parties pull out of this kind of operation and instead seek cooperation with TSMC.
TSMC considers building dedicated fabs for larger clients that are interested and ready to contribute with investments. Interestingly Qualcomm CEO, Paul Jacobs, have expressed interest in investing money with foundries if that is what it takes to secure enough quantities. This does not mean TSMC will abandon its current business model. Our guess is that the company is simply answering to the demands of one or several clients.
Source: Xbitlabs
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