Qualcomm acknowledged it's dissatisfied with TSMC's inability to produce enough 28nm chips and confirmed that it plans to outsource the production of 28nm chips to other foundries. Full details at X-bit Labs.
"We are seeing very strong demand for our industry-leading Snapdragon 4/MSM8960 and other 28nm products. Although the manufacturing yields are progressing per expectations, there is a shortage of 28nm capacity. We are working closely with our partners to bring additional capacity online. However, the constraints on 28nm supply are limiting our potential revenue upside this fiscal year. [...] We are increasing our operating expenses to facilitate additional 28-nanometer supply," said Paul Jacobs, chief executive officer and chairman of Qualcomm, during the latest conference call with financial analysts.
Qualcomm confirmed that it is working with its other partners among contract makers of semiconductors to manufacture the Snapdragon S4 and potentially S5 products at their capacities. Since that required significant redesign of chips as well as creation of new masks, validation and a lot of other actions, the company will have to spend additional OpEx [operating expenditure] money to enable second or third sources for 28nm products.