Higher iPhone sales may make it harder for TSMC to meet AMD’s 7nm chip orders. Intel has produced its own CPUs in its own in-house foundries, and over the past year, it has struggled to produce enough 14-nanometer chips due to its shift to newer 10nm chips. The shortage of chips has frustrated PC makers, with many manufacturers turning to rival AMD to meet their CPU needs.
Outsourcing the CPU production to GlobalFoundries and Taiwan’s semiconductor manufacturing company AMD did not struggle for a shortage of 14-nanometer chips. Therefore, according to PassMark, during the fourth quarter of 2018 to 2019, AMD’s market share rose from 22.9% to 30.3%, while Intel’s share fell from 77.1% to 69.7%. AMD’s first generation of Ryzen CPUs is a 14nm chip. The second generation of Ryzen released last year is a 12-nanometer chip.
The third-generation Ryzen (Zen 2), introduced earlier this year, combines a 7-nm core with 12-nm and 14-nanometer. These hybrid chips may make AMD ahead of Intel, which expects to release its first 7-nanometer chip by 2021.
However, recent reports indicate that AMD should actually be more worried about Apple than Apple, because the new iPhone 11 chip may lead to a shortage of 7-nanometer chips. Let’s see how Apple is causing trouble for AMD and whether it can give Intel a chance to catch up.
How does Apple cause a shortage of AMD chips?
According to the Nikkei Asia Review, Apple recently told its suppliers to increase production of its iPhone 11, iPhone 11 Pro and iPhone 11 Pro Max by 10%. All three phones use Apple’s new A13 Bionic chip, which is a 7-nanometer chip produced by TSMC.
The 7nm core in the AMD Zen 2 CPU is manufactured by TSMC. 14 and 12 nm are manufactured by GlobalFoundries. Last month, DIGITIMES reported that TSMC has increased its lead-time for its 7-nanometer chips from two months to six months, and it has tripled, and TSMC advises customers to order them throughout 2020 to avoid delays.
That’s why the Inquirer cited DIGITIMES’s data recently claiming that AMD is “competing for capacity” at TSMC. This is not surprising. Apple’s latest requirements may exacerbate this pain and bring delays to AMD and other top TSMC customers such as NVIDIA.
In addition to the 7nm CPU, AMD’s latest graphics card (competing with NVIDIA) is also supported by 7nm GPUs. These two business units are a core part of AMD’s computing and graphics division, which accounted for 61% of sales in the last quarter.
But Apple’s iPhone is not the only problem with AMD. GlobalFoundries and TSMC recently filed several lawsuits in the United States, Germany and Singapore, and both foundries claimed that the other party infringed their patents. It’s too early to say the outcome of these lawsuits, but for AMD Zen 2, this is not good news. Zen 2 combines the components of GlobalFoundries and TSMC.
Is this an opportunity for Intel?
Intel has not solved the shortage of 14 nanometers, but recently it launched the 10 nanometer Ice Lake CPU. These CPUs, which are only for the notebook market, can help Intel eventually regain some market share from AMD and appease frustrated PC makers.
However, AMD’s 7nm Zen 2 CPU is still ahead of Intel’s highest-end 14nm Coffee Lake chip in various industry benchmarks. Intel claims that its 10nm CPU will be ready for the data center market in the second half of 2020, but has yet to provide any clear plans for the desktop market.
It seems that Intel plans to test the water in 2020, hoping that its new 10 nanometer chip will give it some breathing space for AMD, and the plan to counterattack with the new 7 nanometer chip in 2021 has not stimulated greater confidence, and It indicates that AMD has overcome the production bottleneck of TSMC and the conflict with the law of GlobalFoundries, and can still maintain its leading position.
So far, AMD has not disclosed any production problems, so the impact of higher iPhone orders on TSMC and its major customers is still speculation. AMD may struggle on production issues, but it may not be as free as Intel is this year, and it should continue to compete with larger competitors in the desktop and server markets.
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