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Supply chain partners see mixed impacts from iPhone order cuts
Source: DIGITIMES   Editor: Helan   Update Time :2018/11/28 17:32:02

Taiwan Semiconductor Manufacturing Company (TSMC) has been little affected by a cutback in chip orders for Apple's new iPhones as many of its other fabless clients are queuing for its 7nm process capacity, according to industry sources.

But most other iPhone supply chain partners are expected to see their revenues decline starting November on Apple reducing orders amid lackluster sales performance for its new devices, the sources said.

The sources continued though its shipments of A12 chips for the three new iPhone models may decrease quarter by quarter, TSMC has seen its 7nm process capacity fully booked by major clients. Now busy delivering 7nm Kirin 980 chips for Huawei Mate 20 smartphones, the foundry giant is slated to start volume production of Qualcomm's Snapdragon 8150 chips on 7nm node in the first quarter of 2019 after the new mobile AP is released in mid-December, the sources said.

AMD is set to release its Radeon Instinct M160 and M150 server accelerator chips by the end of 2018 and in the first quarter of 2019, respectively, which will also be fabricated on 7nm process at TSMC. AMD's EPYC server processor, codenamed "Rome," will also be launched in 2019 and built by TSMC with 7nm node.

Other first-tier clients including Broadcom, Xilinx and Nvidia have also placed orders with TSMC for 7nm process production. TSMC expects to complete more than 100 tape-outs for 7nm and 7nm EUV processes in 2019, with its revenue ratio for 7nm process to surge to over 20% from 10% in 2018.

On another front, as Apple has reportedly enforced a second wave of order reduction in the wake of weaker-than-expected sales for its new iPhones, many other Taiwan supply chain partners are beginning to feel the pinch in November.

iPhone camera lens supplier Largan Precision, for instance, has estimated its November revenues will fall from October. Career Technology, a supplier of flexible PCBs for iPhones, have recently laid off 110 dispatched workers to cope with order cuts by Apple.

An iPhone assembler has also advanced its workforce trimming project, seeking to reduce personnel cost and other expenses to counter the greater-than-expected reduction of orders.

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