The race to make the most advanced chips for smartphones and tablets is gaining steam, with contract chip manufacturer TSMC hastening implementation of its latest manufacturing technology to close a chip-making advantage long held by Intel.
TSMC (Taiwan Semiconductor Manufacturing Co.), the world's largest contract chip manufacturer, on Thursday said it is breaking its traditional two-year manufacturing upgrade cycle and will start making chips using the 16-nanometer process early next year. The company earlier this year started making chips for devices such as smartphones and tablets using the 20-nm process.
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Smartphones and tablets are getting smaller, faster and more power-efficient thanks to new manufacturing technologies and the reduction in the size of transistors. Intel's manufacturing capabilities are considered the most advanced today, and TSMC's quick jump to a new process could allow the company's customers to bring faster and more power-efficient chips to mobile devices a year ahead of schedule. The nanometer process refers to the underlying physics used in fabrication plants to create substrates on which chip features are etched.
One of the recent advances in manufacturing technology is stacking transistors on top of each other -- called FinFET or 3D transistors by the semiconductor industry -- instead of placing transistors next to each other. That helps squeeze more power efficiency and boost performance of chips, which is reflected in the speed and battery life of smartphones.
TSMC will move to FinFET with the 16-nm process, speeding up its usual upgrade cycle.
"It used to be two years; in the case of 16-nm FinFET, it is just one year," said Morris Chang, chairman and CEO of TSMC, during a webcast on Thursday to discuss the first-quarter earnings results.
TSMC's customers include Qualcomm and Nvidia, whose chips are based on ARM processor designs, which are used in most smartphones and tablets. Intel will move from its current 22-nm process to the 14-nm process later this year, and hopes to use its manufacturing advantage to stay ahead of ARM-based chip makers. Intel is still trying to gain a foothold in the smartphone and tablet markets.
The early jump to 16-nm came due to "market requirements, customer requests," Chang said.
The production trial of 16-nm chips is already under way, with TSMC making a chip based on ARM's 64-bit processor design. TSMC has also announced it will make Imagination Technologies' PowerVR Series6 graphics cores on the 16-nm process. Graphics cores based on PowerVR designs are used in Apple's mobile devices, Samsung's eight-core Exynos Octa 5 chip, Intel-based tablets and other products.
Tablets and smartphones are using chips made using TSMC's 28-nm process, and 16-nm chips could conceivably reach mobile devices sometime next year or in 2015, said Nathan Brookwood, principal analyst at Insight 64.
"The reason they pulled this in is because Intel has been touting FinFET for a while," Brookwood said, adding that TSMC had to move quickly to catch up to Intel's 14-nm technology.
Companies typically send in chip designs to manufacturers like TSMC, who make the silicon and send it to chip makers for testing. Once design issues are resolved and volume manufacturing starts, it could be three to six months or longer for chips to reach devices.