Apple’s Increased Reliance on TSMC Prompts Samsung to Lower Chip Production

26 Mar

Samsung will apparently be decreasing the proportion of chips produced at its Austin, Texas plant due to the company’s increasing inventory and “lack of demand from Apple,” UDN reports.

Citing information provided by an unnamed Samsung manager (via Korea Times), the article claims that the Texas plant’s future investment budget has been trimmed by as much as 25% to $1 Trillion Won during this year, and added that in February, the facility’s utilization rate was only around 70%.

“Due to the low chip orders from Apple, our US plant’s utilization rate has not been as high as expected,” the Samsung employee was quoted as saying.

The report appears generally consistent with a number of ongoing rumors pertaining to TSMC, which perceive the Taiwanese manufacturer as being Apple’s next major chip supplier as it reduces its reliance on Samsung.

Interestingly, the Korean giant’s active migration towards 14 nm and 16 nm technology, along with its subsequently lowered devotion and investment in the 20 nm process, is perceived to be another potential reason why Apple is favoring TSMC, and not Samsung, for the production of its next gen processor.