Apple Focuses on Developing Own Application Processors
What's in Store for the Memory Product Space in 2016?
Taiwan Semiconductor Manufacturing Company to benefit
Smartphone shipments have seen a decline since 2014 after a period of exponential growth with the launch of the first iPhone. TrendForce expects smartphone shipments to grow 7.3% YoY (year-over-year) in 2016. The smartphone market’s five major players are Apple (AAPL), Samsung (SSNLF), Huawei Technologies, Xiaomi, and Lenovo (LNVGY). According to DRAMeXchange analyst Avril Wu, smartphone vendors are looking to increase investments in the production of their own APs (application processors) to maintain market share and profit margins.
“This rising trend of making APs in-house will foremost benefit TSMC, the global leader in the semiconductor foundry business,” said Wu. “In order to get the best performance out of their in-house APs, smartphone vendors will line up to use TSMC’s leading-edge 16nm technology to manufacture their chips. Their contracts with the foundry giant may even include the use of integrated fan-out wafer-level packaging (InFO WLP) technology. With the semiconductor market evolving rapidly, TSMC’s client base will continue to shift, from the initial customers such as AMD and NIVIDIA to AP leader Qualcomm and then to major smartphone vendors including Apple and Huawei during these two years.”
Apple to maintain high level of hardware-software integration
Apple’s strategy of maintaining a high level of hardware-software integration has benefited the company immensely. It develops its own APs for its iPhones, which has helped make its products user friendly and top performers in the smartphone segment. Samsung manufacturers chipsets, which, in addition to reducing the excess capacity of its foundry unit, helps the company gain IC (integrated circuit) design experience.
Apple constitutes 14% of the iShares S&P Global Information Technology ETF (IXN) and 12.2% of the PowerShares QQQ ETF (QQQ).
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