Since we exclusively reported that Apple had taped out CPUs at TSMC, there has been the looming question of capacity. Apple uses a lot of chips, and they are not exactly small chips either. TSMC has limited capacity on their cutting edge processes, and if you depend on that, things can be a little problematic at times. Ask AMD about the 5xxx shortages when 40nm had hiccups.
Apple wants lots of chips, and because of this, they want lots of cutting edge wafers. If you have ever seen an Apple supplier contract, you know that they demand first priority on everything, and are pretty ruthless negotiating every detail. This is the long way of saying everyone else but Apple will lose out when there is a shortage.
One more thing to add, moles, ehem sources, say that TSMC’s yields on 28nm are not all that great. While we don’t know if the contracts with Apple specify a minimum number of wafers or minimum good die, either way, the initial guesstimates are unlikely to match the parts coming out. This means Apple will want, nay need, more wafers. What Apple wants, Apple gets. When Apple gets, everyone else looses.
That brings us back to AMD and Nvidia. They seem to want 28nm wafers as well, and in high volumes. They may not need quite as many as Big White, but they need a lot, and it is unlikely that TSMC has that many to offer. To lessen demand, TSMC came up with a cunning plan, raise prices to make the wafers less attractive. Either that or just rake in more cash.
In the end, we hear that prices for 28nm products just went up by somewhere between 15-25%, lets call it low 20′s. If 28nm wafers cost about $5000, this is around a $1000+ bump. You can probably understand why this would make GPU makers very unhappy, especially if you look at the 28nm lineups we exclusively published a few weeks ago (Nvidia here, AMD here).
The short story is that Nvidia is looking to capitalize on 28nm as a cost down measure for laptop chips, AMD less so. Given the margins on low end products, one has to wonder if this move just made initial profits on the new line just go *POOF*. Either way, you can bet both companies are not going to be happy. One has to wonder if this is why AMD is trying to move later SI/HD7000 production back to GloFo. Happy times continue.S|A
Updated: typo corrected 4xxx series to 5xxx series.
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