Half of MediaTek's 16nm chip orders placed with Taiwan Semiconductor Manufacturing Company (TSMC) will be shifted to Globalfoundries, according to a report from Taiwan's TechNews.

MediaTek uses TSMC's 16nm FinFET process to manufacture its Helio P20 and P25 chips, but the fabless chip firm is looking to transfer half of the orders to Globalfoundries starting 2018, the report said, without citing its source.

MediaTek is striving to improve its gross margin. As Globalfoundries offers cheaper quotes than TSMC, Globalfoundries' foundry services are attractive to MediaTek, the report noted.

MediaTek had reportedly cut its 28nm chip orders to TSMC for June, July and August by a total of around 20,000 wafers. The planned cutback in 16nm chip orders has drawn the attention of the chip industry to the impact on the future relationship between MediaTek and TSMC, the report indicated.

MediaTek co-CEO Rick Tsai said recently that MediaTek will be working with TSMC in the development of 7nm chips. MediaTek is also looking to work with other foundry chipmakers, Tsai added.

MediaTek's present task is to stabilize its gross margin, and to gradually regain its lost market share, according to company chairman Ming-Kai Tsai.