Smartphone-use application processor (AP) makers in Taiwan and China are teaming up closely with Taiwan Semiconductor Manufacturing Company (TSMC) to compete with Qualcomm-Samsung in the global 10nm AP market, according to industry sources.

MediaTek, HiSilicon Technologies and Spreadtrum Communications have decided to fabricate their next-generation smartphone APs using TSMC's 16/10 nm processing nodes, the sources indicated.

However, Qualcomm will continue to cooperate with Samsung to produce its next-generation chips utilizing 10nm technology available at the Korea-based foundry house, the sources added.

Qualcomm has not yet engaged in any R&D projects or trial production of 10nm products at TSMC, indicating that it has no intention of manufacturing its next-generation chips by using TSMC's 10nm technology, the sources explained.

As a result, TSMC's initial clients of its 10nm process will mostly include Apple, MediaTek, HiSilicon and Spreadtrum, the sources indicated.

TSMC's 10nm manufacturing process is expected to enter volume production in the fourth quarter of 2016 or early 2017 at the earliest, noted the sources.