Apple Inc. (NASDAQ:AAPL) has entered into a three year agreement with Taiwan Semiconductor Manufacturing Company (TSMC) and its IC design service partner Global UniChip. The Taiwanese firm will provide foundry services for the next A-series chips built using 20nm, 16nm and 10nm process nodes, says a report from Digitimes, citing industry sources.

TSMC

TSMC Production Schedule

According to the sources, TSMC will begin the production for Apple Inc. (NASDAQ:AAPL)’s A8 chips in July 2013, and will ramp up the production capacity after December for producing 20nm ones. In the first quarter of 2014, the foundry will complete the installation for a batch of new 20nm fab equipment, which can manufacture upto 50,000 wafers.

The sources further reveal that a part of the estimated at 20,000 wafers production capacity can be upgraded later to produce wafers for 16nm chips. At the end of the third quarter, TSMC has scheduled to mass manufacturer the Apple Inc. (NASDAQ:AAPL) A9 and A9X processors.

Which Apple product will use these?

The new iPhone expected to release in early 2014 will use the upcoming Apple Inc. (NASDAQ:AAPL) A8 processor while the A9/A9X chips will power the next generation iPhone and iPad products, claim the sources.

Some of facilities of TSMC’s fab located in southern Taiwan will be used exclusively for producing Apple Inc. (NASDAQ:AAPL)’s A-series processors. Initially, for the production of the chips the company has allocated a capacity of 6,000-10,000 12-inch wafers but the output will increase gradually in 2014.

Earlier, TSMC chairman and CEO Morris Chang told that the foundry’s 16nm FinFET process will start mass production in less than one year after ramping up production of 20nm chips. The process for the production of 20nm was started in the first quarter of 2013.

On being asked about the contract, both TSMC and Global Unichip refused to provide information on customer orders and statuses. Also, there is no information whether or not TSMC will be the only supplier for these Apple-designed chips.

Earlier reports

Just a few days back there have been reports that Apple Inc. (NASDAQ:AAPL) is expected to launch its new low cost iPhone very soon as the major suppliers have started the shipments of the parts, including a 28-nanometer processor from Taiwan Semiconductor manufacturing company (TSMC). The report revealed that apart from TSMC, Largan Precision will supply an 8-megapixel snapper while Foxconn will ship battery modules and the innermost frame. Also, flexible circuits are expected to be provided by Tailflex Scientific.