Rumors are flying around that TSMC is going to help increase the profitability of its smartphone chip clients by reducing its contract prices for the 16nm and 20nm nodes. Several of the foundry's clients have seen their margins shrink due to intense competition in the smartphone chip market.
TSMC will likely lower prices including those for 16nm and 20nm process technologies for its handset-chip customers including MediaTek and other firms supplying chips mainly for Android devices, said the sources.
Intense competition among handset-IC suppliers has led to falling chip prices and affected negatively the suppliers' profitability. Major handset-IC vendors including Qualcomm, MediaTek and Spreadtrum have all suffered gross margin decreases.