MediaTek Moves SoC Manufacturing From TSMC To Save Costs

Recent reports claim that the fabless semiconductor company MediaTek is transferring half of its 16nm orders from its traditional foundry partner TSMC to GlobalFoundries starting 2018. The chipsets that are likely affected by MediaTek's decision include the Helio P20 and the Helio P25. As MediaTek tries to improve its bottom line, the cheaper prices offered by GlobalFoundries allows the company to cut down on its production expenses. The reduction in expenses could then trickle down to increased profits. While the report clearly states that this move by MediaTek only concerns chipsets manufactured on the 16nm process node, it is not clear how will this move impact the ongoing partnership of the two companies with regards to the chipsets manufactured on the 10nm and 7nm process nodes. TSMC currently manufactures MediaTek's flagship SoC, the Helio X30, on its 10nm process nodes and recent reports claim that TSMC will manufacture the upcoming MediaTek flagship chipset on its 7nm process.

As MediaTek transfers its foundry commitments over to GlobalFoundries, the chipset designer will likely utilize the foundry's 14nm FinFET process. The 14nm process currently being used by GlobalFoundries is the same with what is available over at Samsung's foundries. By moving its chipset manufacturing to GlobalFoundries, MediaTek chipsets will use the same process utilized by previous flagship SoC offerings from rival chipset designers Qualcomm and Samsung. However, GlobalFoundries does not offer a counterpart to TSMC's 10nm process node offering but the foundry will offer its own 7nm FinFET process technology by the latter part of 2018.

While MediaTek's decision to move its chipset manufacturing will surely impact TSMC's revenue, it is more likely cushioned by the new partnerships currently being forged by the foundry with other chipset designers. Recent reports claim that TSMC is currently working with Qualcomm in the development of new flagship chipsets on the 7nm process node. In addition, Apple, which designs its own chipsets for its smartphones and tablets, has also moved its chipset production to TSMC. Both of these gains made by TSMC were at the expense of Samsung's foundry operations. The Samsung foundry currently manufactures Qualcomm's flagship chipset, the Snapdragon 835, and has also previously manufactured several Apple chipsets. As TSMC inches closer to the commercial production of chipsets using the 7nm process node, the foundry hopes to gain more customers through an earlier release of more advanced process nodes.

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