The recent earthquake in Taiwan that killed about 100 people could impact the shipment of Apple’s next-gen iPhone 7 and 7 Plus. TSMC, the sole company responsible for supplying A10 processor for the upcoming iPhones, said its manufacturing facilities had suffered severe damages in the 6.4-magnitude quake that occurred on February 6. It has forced TSMC to reduce its shipping estimates.
The damages are greater than previously estimated
Initially, the Taiwanese chipmaker had estimated that damages due to the earthquake would affect its chip shipments by 1%. But TSMC confirmed on Monday that its chip shipments would be “affected over the 1% mark.” Though the company did not give a specific number, it signals a potential holdup with its processor production.
Despite the decrease in wafer shipments, TSMC expressed confidence that it would hit the revenue target of $5.9-$6 billion in the first quarter of 2016. DigiTimes reports that the decline in TSMC’s wafers shipments was “worse than originally assessed.” A serious damage to TSMC’s production facilities may impact the iPhone 7 shipments. TSMC was planning to begin full production of A10 chips in June using its 10nm process technology.
Will Apple call back Samsung for iPhone 7 chips?
With a looming cutback in TSMC’s wafer shipments, Apple could revert to its existing supply chain strategy of having two key suppliers. The Cupertino company could also ask Samsung to manufacture some of the A10 chips to reduce the risk and avoid the possibility of a delay in the iPhone 7 launch. The upcoming iPhone is said to be waterproof. It will reportedly do away with the ugly antenna bands, protruding main camera, and the 3.5mm headphone jack.
Last week, Apple signed an exclusive contract with TSMC to supply A10 chips for the iPhone 7 and 7 Plus. TSMC’s 10nm process technology outclassed that of Samsung. Another reason Apple decided to go ahead with TSMC was the Taiwanese firm’s InFO technology that boosts performance and efficiency. Next month, Apple is expected to unveil a 4-inch iPhone 5se, an iPad Air 3, and new Apple Watch.