The available capacity for 28nm mobile chips at IC foundries, mainly Taiwan Semiconductor Manufacturing Company (TSMC), has become sufficient to meet demand since early 2013. Suppliers of 28nm mobile chips, such as Qualcomm and MediaTek, have now gained bargaining power in price negotiations with their contract manufacturers, particularly backend service providers, according to industry sources.

Major IC backend firms including Advanced Semiconductor Engineering (ASE) and Siliconware Precision Industries (SPIL) have recently been asked by their mobile-chip customers to re-negotiate prices for 28nm products, as constraints related to chips built using the advanced process are easing, the sources indicated.

In fact, mobile-IC vendors intend to first pressure their backend service providers to cut their prices, before negotiating with their foundry partners for a lower price, the sources pointed out. The move is to improve their gross margins and restore some profitability, the sources suggested.

Mobile-chip vendors were previously willing to sacrifice profits and in exchange gain their contract partners' promise for supply priority, the sources said.