Taiwan Semiconductor Manufacturing Company is reportedly investing $700 million in 20-nanometer chip technology to prepare for a possible deal with Apple in 2014.
According to DigiTimes, TSMC kicked off its initiative early in the hopes that it can achieve sufficient production capabilities by the above-mentioned date.
Indeed, the foundry is apparently struggling with the 28nm production process, with reports indicating that TSMC is currently "unable" to provide sufficient capacity.
Nevertheless, overseas supply chain sources believe TSMC has a "good chance" of winning CPU orders from Apple in 2014.
As AppleInsider's Sam Oliver points out, Apple is still using Samsung's 45nm chip process to fab its indigenously designed A5X CPU that powers the wildly popular iPad.
Perhaps not unsurprisingly, Apple is wary of newer chips built on smaller production processes, fearing potential supply constraints that could threaten iPhone and iPad sales. It is unclear when Cupertino plans on making the inevitable jump to 28nm, although the company has already deployed 32nm A5 chips in its third-gen Apple TV and the new iPad 2.
While Apple's primary chipmaker remains Samsung, Apple reportedly signed a major foundry agreement with TSMC in 2011 to build future ARM-based mobile processors.