Apple Inc. (AAPL): TSMC Chip Can Singificantly Boost A8 Performance

iPhone 8JESHOOTS / Pixabay

Apple Inc. (NASDAQ:AAPL) reportedly shifted its chip manufacturing contract away from Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) last year. A few days ago, AFP reported that Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) has started production of the A8 processor that is likely to be used in the iPhone 6. TSMC’s chips will be based on 20nm node, compared to 28nm node in the iPhone 5S. Ashraf Eassa of Seeking Alpha says this will allow Apple to boost the graphic performance of the A8.

Apple iPhone 6 to deliver greater graphics performance

AFP reports, citing supply chain sources, that the new 20nm processor will have quad-core graphics and quad-core 64-bit processor. Apple Inc. (NASDAQ:AAPL) has increased the graphic performance by a whopping 56 times since its first iPhone. The A7, which is used in the iPhone 5S, has almost double the graphic performance of A6. Experts believe that the company is likely to deliver a similar jump with its upcoming A8 processor in the iPhone 6.

Apple Inc. (NASDAQ:AAPL) can achieve its goal in several ways. According to Eassa, increasing the size of the chip or boosting the power envelope can improve semiconductor performance significantly. The shift to 20nm also means the company would be able to use more transistors for graphics. Moreover, implementing Imagination Technologies Group plc (LON:IMG)’s GX6650 graphics chip would result into 2X graphics performance over A7. The Cupertino-based tech giant uses G6430 in the iPhone 5S, which is the second fastest member of Imagination Technologies’ PowerVR Series 6.

Apple may want more control over graphics IP in the future

The move to Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM)’s 20nm node, an updated SOC micro-architecture, Apple Inc. (NASDAQ:AAPL)’s fat pockets, and the improved IP blocks all around will ensure that the A8 delivers significant graphics performance boost over its predecessor. In the future, the iPhone maker may want more control over the graphics IP in its SOCs. Apple is one of the biggest shareholders of Imagination Technologies Group plc (LON:IMG). It is therefore in a position to get early access to the latest patents.

Apple Inc. (NASDAQ:AAPL) shares were little changed at $530.05 in pre-market trading Monday.

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About the Author

Vikas Shukla
Vikas Shukla has a strong interest in business, finance, and technology. He writes regularly on these topics. - He can be contacted by email at vshukla@valuewalk.com or on Twitter @VikShukla10

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