IBM will tap Taiwan Semiconductor Manufacturing Co. (TSMC) for its data center server chips, according to a Nikkei report. The deal is a major win for TSMC as it challenges Intel’s dominance in the data center.

IBM wouldn’t comment on the report and TSMC did not immediately respond to a request for comment. But according to Nikkei, IBM will order TSMC’s 7 nanometer (nm) chips, which also power the core processors in Apple’s newest iPhones.

IBM designs its own chips and has been using another contract chipmaker, Globalfoundries, to produce them. TSMC, however, is the first to market with 7nm technology. Because of this IBM is looking to make the switch, Nikkei reports.

Samsung recently started producing 7nm chips, while Intel’s long-awaited 10nm technology (this is expected to be competitive with the other vendors’ 7nm chips) has been delayed until “holiday of 2019.” In August, Intel admitted difficulty developing its processor technology for 10nm chip manufacturing.

Intel’s x86 server chips still dominate the data center market — Trendforce says it supplies 96 percent of these chips. And in the company’s most recent earnings report Intel said its Data Center Group revenue grew 26 percent year over year to $6.1 billion, hitting an all-time record.

But Intel’s delay in producing next-gen processor technology is giving other vendors an opportunity to steal market share.

Earlier this month, AMD announced that it will use TSMC’s 7nm technology for its latest server processor. Other TSMC customers include Nvidia, Qualcomm, Huawei Technologies' Hisilicon Technologies, Marvell, and Cavium.