Samsung to quadruple mobile chip production for Apple in 2011

Posted:
in iPhone edited January 2014
Sources in South Korea are reporting that electronics giant Samsung will boost its mobile Application Processor fabrication for Apple by a factor of four, producing more chips for the iPhone maker than it uses itself.



According to a report by the Korea Times, a source citing Samsung's suppliers said the firm "has agreed with Apple to quadruple monthly shipments of its mobile AP chips to 20,000 sheets throughout this year from 5,000 last year."



The report said this would result in half of Samsung's mobile Application Processor chip capacity being dedicated to Apple in 2011, making the iPhone maker a bigger consumer of Samsung's mobile chips than Samsung itself, which builds similar chips for its Galaxy S smartphones and Galaxy Tab mini-tablet.



"Samsung aims to chalk up multiple effects through the sales," the translated report stated, citing the same Samsung supplier. "For one, it will be able to strengthen its non-memory business by shipping fast and low-power chips to Apple. That?s a very fine-tuned strategy."



Samsung was also said to be building a new $3.6 billion chip fabrication plant in Austin Texas, "in an apparent scheme to ship more of its mobile processors to Apple," the report noted. The company currently builds APs like Apple's A4 in a factory near Seoul, in a an advanced 45nm facility capable of producing 40,000 sheets of the chips per month.



The company's efforts to expand mobile chip production, with most of it going to Apple, is "also a major blow to local medium-sized tablet PC makers as Apple is more profitable and lucrative for Samsung," the source reported. Samsung will also be fabricating custom chips for Texas Instruments.



Apple designs, Samsung manufacturers



The report erroneously claimed that Apple "stopped buying" APs from Samsung in 2008, and suggested the two companies had strained relations.



Samsung has long built ARM-based processors that Apple uses in its iPhone, iPad and many recent iPods. Prior to last year's introduction of its custom A4 design, Apple used off the shelf Samsung "System on a Chip" processors, which pair an ARM CPU core with dedicated mobile GPU cores and other components in a single part, also called an Application Processor.



Starting in 2008, Apple began licensing its own rights to develop custom AP designs using intellectual property from ARM and Imagination Technologies. It then acquired Intrinsity, which gave Apple the technology to accelerate clock speeds from the 600HMz Samsung SoC in the iPhone 3GS to the gigahertz speed of its new A4 chip used in iPhone 4, iPad, and Apple TV.



However, Apple continued to partner with Samsung to build the new chip, which is similar but not identical to Samsung's own "Hummingbird" AP, used in the firm's own Galaxy S, Galaxy Tab, and forthcoming Galaxy Player.







While the two companies compete in smartphones, tablets, and media players, Apple is an important client for Samsung, not only in the fabrication of Apple's custom APs but also DRAM and NAND flash memory, LCD displays and other components.



At the beginning of last year, Apple was already Samsung's second largest client after Sony and ahead of Dell, HP, Verizon and AT&T. Samsung is the world's largest producer of RAM and flat panel displays, and second largest chip producer behind Intel. Apple is the world's largest consumer of RAM, and is eating up an increasingly large share of mobile APs and displays as sales of iPhones and iPads accelerate.
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Comments

  • jason98jason98 Posts: 700member
    Seems like a business perversion or at least a huge conflict of interests when Apple relies on one of its primary mobile competitors to build the key components.
  • wurm5150wurm5150 Posts: 763member
    Quote:
    Originally Posted by jason98 View Post


    Seems like a business perversion or at least a huge conflict of interests when Apple relies on one of its primary mobile competitors to build the key components.



    Business is business.. The major components that Apple uses on the iPhone and iPad, Samsung happens to be the best at building them.
  • brian greenbrian green Posts: 621member
    I just hope that Apple can design their own chips to be superior to those offered "off the shelf". It would seem to me that designing their own chips will ensure that they can keep the OS running only on Apple hardware, barring another Palm fiasco.



    I'm concerned about what Google is up to. Apple is a fantastic company, and I'll stick with them through thick and thin, but I have a sinking feeling that they aren't throwing everything they have at their products and software. Playing it safe gets you run over.



    It's great that Samsung is stepping up to the challenge of making more chips. I hope Apple is up to the challenges from competitors. I think there are a lot of CEO's out there seeing Steve step aside (though not officially) and are going to start pushing Apple. We'll see if Apple can remain innovative and forward-thinking enough to be on top. I certainly hope so.
  • chris_cachris_ca Posts: 2,517member
    Quote:
    Originally Posted by Brian Green View Post


    I just hope that Apple can design their own chips to be superior to those offered "off the shelf".



    They do.

    From wikipedia...

    "The Apple A4 is a package on package (PoP) system-on-a-chip (SoC) designed by Apple and manufactured by Samsung."
  • tenobelltenobell Posts: 7,014member
    That is exactly what the A4 does and is why Apple purchased its own design IP.



    Apple can design both the OS and chips to optimally work together. With that advantage Apple does not have to compete in the fastest CPU race.



    Quote:
    Originally Posted by Brian Green View Post


    I just hope that Apple can design their own chips to be superior to those offered "off the shelf".



  • tenobelltenobell Posts: 7,014member
    Not at all. Samsung makes a lot of money from building Apple's chips. Why should they give that money to someone else?



    Quote:
    Originally Posted by jason98 View Post


    Seems like a business perversion or at least a huge conflict of interests when Apple relies on one of its primary mobile competitors to build the key components.



  • solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by TenoBell View Post


    That is exactly what the A4 does and is why Apple purchased its own design IP.



    Apple can design both the OS and chips to optimally work together. With that advantage Apple does not have to compete in the fastest CPU race.



    I agree but I think that a dual-core Cortex-A9 can advantage Apple in ways that make likely to appear in the next iDevices. My reasoning is that Apple can increase performance and battery efficiently that only they can take advantage of with a multi-core system over iOS, thereby allowing them to keep the the clock speed lower than their competitors, thus giving it even more battery efficiency per mAh.
  • wizard69wizard69 Posts: 11,714member
    What I mean is that if one looks a little deeper there are a number of interesting things happening with Samsungs microprocessor devision that could be tied with Apple. Some things of note:
    1. Samsung is ready with their 32/28nm process. That means a low power variant of the A4 could be ready real soon now.

    2. Samsung has indicated an interest in partnerships in a discussion involving their new Austin plant.

    3. Apple has indicated that 3.9 BILLION has gone to new capittal and inventory purchases. Since it takes about a billion and a half to get a new semiconductor plant up and running it is very easy to want to connect the dots here. Apple could very well be a partner in this development or new plant.

    4. Samsung is part of a team that developed this process node and the software tools to exploit it. Others involved are Global Foundries and IBM, with a bunch of small fry. The interesting part here is tools compatibility, Apple could have Global Foundries build chips for them with minimal effort.

    5. Samsungs process has been tuned for low power while Globals targets performance. So we could see Samsung making low power chips for Apple while Global produces a higher performance variant. The thought is very interesting. .

    These are just things realized in the last few days.



    Beyond that being so familiar with the software tools used at this node means that Apple can exploit the link between Global Foundries and AMD. They could very well be priding AMD to move Bobcat Fusion to this node and to allow the IP to be used in custom chipsets like they are doing with ARM. What I dream about here is a Bobcat implementation, for Apple, with all the Apple required hardware I/O integrated right on the chip. Maybe extended to use Apples Fast 14 logic. In other words a faster and higher integration Fusion Bobcat. Yes I know this is falling off the road into the speculation mud but I just see the closeness her to be something interesting.
  • wizard69wizard69 Posts: 11,714member
    Quote:
    Originally Posted by TenoBell View Post


    That is exactly what the A4 does and is why Apple purchased its own design IP.



    The problem for Apple is keeping up. I'm glad to see them spreading A4 usage around as it helps to justify R & D. Make no mistake though they are up against tough competition.

    Quote:

    Apple can design both the OS and chips to optimally work together. With that advantage Apple does not have to compete in the fastest CPU race.



    They most certainly do have to compete! Their is a limit to what optimization can do for you. Besides it is software that takes advantage of that hardware. As we have seen on many Android systems software that ignores the built in hardware just sucks.
  • brian greenbrian green Posts: 621member
    Quote:
    Originally Posted by solipsism View Post


    I agree but I think that a dual-core Cortex-A9 can advantage Apple in ways that make likely to appear in the next iDevices. My reasoning is that Apple can increase performance and battery efficiently that only they can take advantage of with a multi-core system over iOS, thereby allowing them to keep the the clock speed lower than their competitors, thus giving it even more battery efficiency per mAh.



    Solipsism, that's kind of what concerns me though. It's one thing for Apple to focus on battery life, and entirely another thing to be behind the curve when it comes to innovation. It's great that Apple designs the A4, but it's only great if it's superior in what it offers as opposed to those with the other chips. Woe be us, the day when someone does a side by side comparison (like Apple used to do on stage, ironically) and Apple's product can't maintain the speed. I've seen in my time (as I'm sure you have in yours) several examples of when Apple played it safe and didn't use the latest and fastest hardware. We're still dealing with issues regarding GPU's that can't compete with their Windows counterparts.



    I think it's great that Samsung is producing the A4 for Apple. My greatest concern is Apple failing to take the lead and having Google throwing all of their resources at the competing products. Apple can not afford to fall behind now. Playing against the likes of Google, there's never a chance to recover when one drops the ball. I'm hoping Apple realizes that with every fiber of their being and brings their A-Game. That means remaining ahead of the curve on internal components. Here's to hoping the A5 (or whatever they call the next version) will be able to surpass the competition and keep Apple in the lead. Here's also to hoping that iOS continues to exceed expectations with Android gunning for it.
  • tenobelltenobell Posts: 7,014member
    Oh yes absolutely. I wasn't suggesting that Apple should not be aggressive in updating its specs. They absolutely should be aggressive, especially since they only upgrade once a year.



    I just meant it wasn't as important for Apple to be in the incremental race. Like Android phones coming out every couple of months with small incremental improvements. One with 1Ghz CPU, then 1.2 Ghz, then 1.25Ghz, and so on.



    The Motorola Atrix 4G will have 1GB of RAM. Seeing as Apple has set up preferential treatment with regard to flash memory. That should be a good indicator of what the iPad 2 and iPhone 5 will look like.



    Quote:
    Originally Posted by solipsism View Post


    I agree but I think that a dual-core Cortex-A9 can advantage Apple in ways that make likely to appear in the next iDevices. My reasoning is that Apple can increase performance and battery efficiently that only they can take advantage of with a multi-core system over iOS, thereby allowing them to keep the the clock speed lower than their competitors, thus giving it even more battery efficiency per mAh.



  • tenobelltenobell Posts: 7,014member
    Quote:
    Originally Posted by wizard69 View Post


    The problem for Apple is keeping up. I'm glad to see them spreading A4 usage around as it helps to justify R & D. Make no mistake though they are up against tough competition.



    In the time Apple has been using Intel processors they've never felt pressured to update on everyone else's schedule. They maintained their own. When they upgrade their machines they leap past everyone else.



    Quote:

    They most certainly do have to compete! Their is a limit to what optimization can do for you. Besides it is software that takes advantage of that hardware. As we have seen on many Android systems software that ignores the built in hardware just sucks.



    As I said to Sol' I mean they don't have to compete with the spec game every couple of months like everyone else.
  • tenobelltenobell Posts: 7,014member
    What issues are those? Apple is innovating in graphics processing with technology like hardware acceleration and Open CL. Their emphasis is more in the quality of the software so that you don't necessarily have to have the fastest hardware.



    Quote:
    Originally Posted by Brian Green View Post


    We're still dealing with issues regarding GPU's that can't compete with their Windows counterparts.





    Google doesn't manufacture the phone. They only provide the OS. The iPhone itself is competing against Motorola, HTC, Samsung, LG, Sony/Ericson. They design the phone itself.



    Quote:

    My greatest concern is Apple failing to take the lead and having Google throwing all of their resources at the competing products.



  • ksecksec Posts: 1,177member
    It is not as simple as bringing your design to an Chip Plant and expect it to work. Even though they are the same node.



    i.e you can expect a design work with the same on Samsung 32nm node and GF node.



    P.S - Yes i know they are co developed with IBM and GF, but it is not just that simple. Retuning and Respin will take at least 3 - 4 weeks, ( and that is just best case scenario ) then it will take another month to get it up to speed and full production.



    I think the new Fab will work the same way as Foxconn. Where Both company are now building Sites and Plant specially for Apple. This provide greater control and secrecy that apple needs while off setting the cost of actually running production themselves.



    Apple will leverages their management expertise, purchasing price on equipment etc.
  • penchantedpenchanted Posts: 1,070member
    Quote:
    Originally Posted by wizard69 View Post


    What I mean is that if one looks a little deeper there are a number of interesting things happening with Samsungs microprocessor devision that could be tied with Apple. Some things of note:
    1. Samsung is ready with their 32/28nm process. That means a low power variant of the A4 could be ready real soon now.


    2. Samsung has indicated an interest in partnerships in a discussion involving their new Austin plant.

    3. Apple has indicated that 3.9 BILLION has gone to new capittal and inventory purchases. Since it takes about a billion and a half to get a new semiconductor plant up and running it is very easy to want to connect the dots here. Apple could very well be a partner in this development or new plant.

    4. Samsung is part of a team that developed this process node and the software tools to exploit it. Others involved are Global Foundries and IBM, with a bunch of small fry. The interesting part here is tools compatibility, Apple could have Global Foundries build chips for them with minimal effort.

    5. Samsungs process has been tuned for low power while Globals targets performance. So we could see Samsung making low power chips for Apple while Global produces a higher performance variant. The thought is very interesting. .




    My one question about an Apple tie-in to Samsung's Austin facility is what would it buy for Apple? Anything produced here would need to be sent to China for final assembly thus lengthening the supply chain.



    I could possibly see a benefit if Apple continues to be ahead of the design curve (something which you legitimately question) and that design engineering could be sequestered in Austin.



    Beyond that, there is the benefit of creating some jobs in the US but, as mentioned above, this would need to be weighed against the longer supply chain. Is it possible that this is a first step in returning some final assembly to the US? That seems very unlikely.
  • penchantedpenchanted Posts: 1,070member
    Quote:
    Originally Posted by ksec View Post


    I think the new Fab will work the same way as Foxconn. Where Both company are now building Sites and Plant specially for Apple. This provide greater control and secrecy that apple needs while off setting the cost of actually running production themselves.



    Apple will leverages their management expertise, purchasing price on equipment etc.



    Now this does make some sense: Apple's secret stuff sequestered in "for-Apple" plants.
  • solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Brian Green View Post


    Solipsism, that's kind of what concerns me though. It's one thing for Apple to focus on battery life, and entirely another thing to be behind the curve when it comes to innovation. It's great that Apple designs the A4, but it's only great if it's superior in what it offers as opposed to those with the other chips. Woe be us, the day when someone does a side by side comparison (like Apple used to do on stage, ironically) and Apple's product can't maintain the speed. I've seen in my time (as I'm sure you have in yours) several examples of when Apple played it safe and didn't use the latest and fastest hardware. We're still dealing with issues regarding GPU's that can't compete with their Windows counterparts.



    I’m not sure I follow you. There are many ways in which something can be superior. For instance, the clock speed of many high-end Android phones are superiour to the iPhone 4. The ones I’m referring to are coming as 1GHz Cortex-A8 compared to about 750-850Mhz Apple A4 in the iPhone 4. Despite this inferior number of cycles per second the device feels faster in the UI as the code is more refined from the drivers to the OS to the apps and even the SDK. This has allows Apple to take a huge lead in battery performance over the competition without negatively affecting it’s performance. The only area that Apple is behind is with JS performance in Safari which is using the native WebKit engine compared to Google’s V8 for Android and Chrome browsers.



    I think it was last month I read an article that showed the rapid increase in HW performance over the years, but also stated that better algorithms has increased performance 43x times more than Moore’s Law over the past 15 years.
    "Seen on the blog 'Algorithmic Game Theory,' a report to congress and the president about past and future advances in information technology notes that, while improvements in hardware accounted for an approximate 1,000 fold increase in calculation speed over a 15-year time-span, improvements in algorithms accounted for an over 43,000 fold increase."
    I’ve posted the image a few times at AI so I’ll refrain this time, but AnandTech’s thorough testing of smartphones has revealed that even older iPhones with only 802.11g have better throughput than Android devices with 802.11n. That tells me that HW alone may look good on a spec sheet to some, but it is not a measure of performance of a complete device in and of itself.



    Quote:

    I think it's great that Samsung is producing the A4 for Apple. My greatest concern is Apple failing to take the lead and having Google throwing all of their resources at the competing products. Apple can not afford to fall behind now. Playing against the likes of Google, there's never a chance to recover when one drops the ball. I'm hoping Apple realizes that with every fiber of their being and brings their A-Game. That means remaining ahead of the curve on internal components. Here's to hoping the A5 (or whatever they call the next version) will be able to surpass the competition and keep Apple in the lead. Here's also to hoping that iOS continues to exceed expectations with Android gunning for it.



    I think Apple’s position with their own variations of chips, drivers, their own OS and so on, along with decades of experience in these areas at some level has put them in a unique position that no one can touch at this point. Add to that their expertise in marketing, sourcing components and "factory dynamics” and I don’t know of a single company that can match them on all those levels.



    MS has limited experience in HW. Google has new experience in an OS and no experience in HW. Samsung is bada at writing code. I’d think Sony and Nokia should be Apple’s biggest challenge but their myopic focus seems to be hurting with each new quarter.
  • ksecksec Posts: 1,177member
    Quote:
    Originally Posted by penchanted View Post


    Now this does make some sense: Apple's secret stuff sequestered in "for-Apple" plants.



    Foxconn already have some of these in place. But by Foxconn' size ( Whom literally assemble EVERY single PC sold today ), Apple's line of Mac were small to separate from others. Until iPhone came along.



    That is Why Foxconn are building new sites now specially dedicated to Apple. And as you may have already read, Foxconn's subsidiary CyberMart are now getting First Class Citizen treatment from Apple in selling Apple 's Product in China, Taiwan and Hong Kong Market.
  • ksecksec Posts: 1,177member
    Quote:
    Originally Posted by penchanted View Post


    My one question about an Apple tie-in to Samsung's Austin facility is what would it buy for Apple? Anything produced here would need to be sent to China for final assembly thus lengthening the supply chain.



    I could possibly see a benefit if Apple continues to be ahead of the design curve (something which you legitimately question) and that design engineering could be sequestered in Austin.



    Beyond that, there is the benefit of creating some jobs in the US but, as mentioned above, this would need to be weighed against the longer supply chain. Is it possible that this is a first step in returning some final assembly to the US? That seems very unlikely.



    Samsung would need to built new plant in order to fulfill Apple's demand. And when South Korea Econ are growing stronger while USD are now worth like crap, building a Plant in US actually make much more sense then 3 - 5 years ago. Not to mention most of the High Tech Fab Equipment Manufacture are located in US anyway.
  • brian greenbrian green Posts: 621member
    It's good to read the interesting aspects of the hardware differentiation and variables associated with the OS, drivers, and the like. I'm running an "old" Mac Pro from the technology perspective, but it still does wonders for me. In the burgeoning market of the iPad it seems like there's so much competition out there. Engadget is filled with new iPad copycat designs and there are tons of phones out there that look so similar to the iPhone 4 that it's hard to determine the difference from more than a few feet away. I guess all of my statements come down to my hoping that Apple doesn't lose this battle like it lost the desktop battle. I have big hopes for iOS and for Lion. Having Samsung make whatever chip it is that Apple will use is a good thing, because they seem to do that very well.



    As for my prior statement regarding graphics, it was in relation to Apple's history of being behind the PC makers with regard to GPU performance. The #1 problem I have with my Mac Pro is the NVidia card I have in it. It seems like every Mac I've owned, the GPU was it's weak point. I'm really hoping this will soon be a "past experience" case. My iPhone 3Gs does alright with games, but I can already tell it's at the edge of its capabilities. The A4 seems to be doing fantastically with regard to the iPhone 4 and the iPad, but moving forward requires much more detail. The Retina screen on the iPhone 4 is drool-worthy, but I can't bring myself to buy an iPad with the resolution it's sitting at. The 4x3 aspect ratio drives me nuts too when everything is moving away from that ugly aspect ratio. If you want your head to explode, try watching an old DVD in the old Full Screen mode as it was called. It just sucks. I'm waiting for an iPad that gives me native 16x9 HD resolution. I might have to wait a couple of versions, but it's what my eyes want. Hopefully Apple will move toward that soon and we'll have a "snazzy" new Apple chip pushing the thing.
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