Apple processor supplier TSMC has reportedly started taping out the design for the A11 chip. This chip might enter small-scale production as early as the second quarter of 2017, probably to prepare for the iPhone 7s, which will be released that year, claims DigiTimes.

Chips For iPhone 7S

Will Apple follow a two-supplier strategy for A11?

Currently, TSMC is working on the 10-nanometer FinFET process, and the new chip design is based on this, says the report. It’s expected that the certification for the process will come in the fourth quarter of 2016 and that in the following quarter, sample deliveries will be made to the iPhone maker. Then in the second half of 2017, the chips to be used in the iPhone 7s will likely be shipped.

Two-thirds of the total A11 orders will be go to TSMC, DigiTimes says, citing unnamed sources. Which company will handle the remaining one-third was not specified in the report, but it is expected to be Samsung. The Korean firm has been producing a fraction of the A9 chips for the iPhone 6s and 6s Plus. Apple’s A-series processors were solely made by the Korean company for several years.

There have been rumors that the iPhone 7 coming later this year will come with A10 chips and that TSMC could be the sole supplier. If this is true, then what could cause Apple revert to a two-supplier system for the A11 is not clear; price competition and capacity could be valid reasons though.

The chip designs used in the current iPhones are either 14- or 16-nanometer, depending on the manufacturer, whether Samsung or TSMC. If the die size is shrunk further, it will allow more compact designs and better power efficiency. The 2018 iPhone might use 7-nanometer chips, or Apple may be forced to use 10-nanometer chips, depending on the supplier’s progress.

A11 for iPhone 7s or iPhone 8?

Currently, Apple follows a two-year upgrade cycle for its smartphones. If this holds, the A11 could come with the iPhone 7s, the likely successor to the next-generation iPhone 7 expected this fall. However, Mark Moskowitz, an analyst with Barclays, speculated that Apple will likely skip its traditional S upgrade cycle next year altogether.

Last month, Moskowitz said that in 2017, we won’t get to see a spec-bumped, internally upgraded iPhone 7s. Rather, he said the next release will be a completely overhauled iPhone 8 that will come with major design changes and will boast of next-generation features such as wireless charging.

In both cases, the iPhones running on the A11 processor are expected to be launched in the second half of 2017.