Apple 'gets serious' about moving chip production away from Samsung - report
The relationship between Apple and Samsung has moved from "love-hate" to simply "hate-hate," according to a new report, which indicates that Apple is doing all it can to cut ties with its fierce rival.
Though Apple still relies on Samsung for production of its mobile processors, the iPhone maker has apparently made it clear it will no longer use Samsung's technology, an unnamed senior official at the Korean electronics company said to The Korea Times. The report indicated that the relationship between Samsung and Apple is "now about to become one-dimensional."
"There are three types of chip clients," the Samsung source reportedly said. "Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture. Some wants us to just make the chips. Apple is now the third type."
Samsung did reportedly earn more money for manufacturing the A6 processor for Apple's iPhone 5 than the company did from building earlier custom chips. But at the moment, Samsung is said to be the only semiconductor manufacturer in the world that can meet Apple's needs for high volume of chip production in a short period of time.
Apple did not collaborate with Samsung in the development of the A6 processor found in the iPhone 5. While Apple collaborated with Samsung in designing its earlier processors, the new A6 chip marks the first time Apple designed its own ARMv7 core.
The details come soon after Apple was revealed to have hired away former Samsung chip designer Jim Mergard. Prior to his brief stint at Samsung, Mergard designed and developed chips for Advanced Micro Devices for 16 years.
Another report last week also reiterated claims that Apple plans to have future chips built by Taiwan Semiconductor Manufacturing Co., taking away a key component from Samsung. It was said that TSMC could build quad-core 20-nanometer chips for Apple by as early as next year.
Though Apple still relies on Samsung for production of its mobile processors, the iPhone maker has apparently made it clear it will no longer use Samsung's technology, an unnamed senior official at the Korean electronics company said to The Korea Times. The report indicated that the relationship between Samsung and Apple is "now about to become one-dimensional."
"There are three types of chip clients," the Samsung source reportedly said. "Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture. Some wants us to just make the chips. Apple is now the third type."
Samsung did reportedly earn more money for manufacturing the A6 processor for Apple's iPhone 5 than the company did from building earlier custom chips. But at the moment, Samsung is said to be the only semiconductor manufacturer in the world that can meet Apple's needs for high volume of chip production in a short period of time.
Apple did not collaborate with Samsung in the development of the A6 processor found in the iPhone 5. While Apple collaborated with Samsung in designing its earlier processors, the new A6 chip marks the first time Apple designed its own ARMv7 core.
The details come soon after Apple was revealed to have hired away former Samsung chip designer Jim Mergard. Prior to his brief stint at Samsung, Mergard designed and developed chips for Advanced Micro Devices for 16 years.
Another report last week also reiterated claims that Apple plans to have future chips built by Taiwan Semiconductor Manufacturing Co., taking away a key component from Samsung. It was said that TSMC could build quad-core 20-nanometer chips for Apple by as early as next year.
Comments
So Samsung's blatant copying of Apple's designs cost them $1 B in fines and $10 B in lost business.
While they are picking up lots of cell phone business, much of it is at relatively low margins. More importantly, they could have picked up most of that business by coming up with their own designs that were merely inspired by the iPhone rather than a blatant copy.
Apple needs about 30K wafers starts per month. This is rapidly growing to about 55K wafers starts in 2014-15.
Apple needs a whole foundry by themselves. The best way is to buy an idle plant from Intel or that Apple pays TSMC a bunch of money for a whole line to them selves.
Having an own high quality foundry would be a huge advantage for Apple. Especially since they will move everything to their own A class SoC.
Todays A6 is as fast as the fastest intel per mhz. (and I know... Intel have 6 cores are clocked 3-4 times higher, so Intel is faster. But nothing stops Apple from designing quad or octo core A6 feed more power to make it 2.5ghz. Nvidia will introduce a 8 core ARM late this year/q1 next year)
Quote:
Originally Posted by digitalclips
I am curious ... is it possible for the design to be reverse engineered by Samsung with the third type of client?
I'll bet that any Samsung division responsible for fabricating chips for Apple would rather side with their client than with their parent.
@ $10 billion/year, Apple business is the equivalent to 20 million smartphone sales ($10B / $500 per phone). It's a major hit to their overall business
And wait until Apple enters the TV market. TVs are 25% of Samsung's business. The hurt for Samsung is just getting going
Quote:
Originally Posted by digitalclips
I am curious ... is it possible for the design to be reverse engineered by Samsung with the third type of client?
I don't think so. If Apple provides a netlist Samsung can copy it but has no (VHDL) design.
Such a low level description has almost no design information, like the binary code from a C program after compilation.
So Samsung can make an exact copy of the information (and that's a must if Samsung is to produce the chip) but it cannot make variations or use parts of the design the netlist originates from.
J.
Quote:
Originally Posted by shompa
Apple have a huge problem. They are to big.
Apple needs about 30K wafers starts per month. This is rapidly growing to about 55K wafers starts in 2014-15.
Apple needs a whole foundry by themselves. The best way is to buy an idle plant from Intel or that Apple pays TSMC a bunch of money for a whole line to them selves.
...
This is not the best way and it is not how Apple does business. When Apple needs its own manufacturing capacity, it uses its cash reserves to build the factory capacity for its contractor.
Quote:
Originally Posted by Red Oak
This cannot come soon enough. Given what I've observed with Samsung, I believe there is a 30% or greater chance the Samsung fabrication side of the business has shared confidential Apple CPU design info with their mobile team
@ $10 billion/year, Apple business is the equivalent to 20 million smartphone sales ($10B / $500 per phone). It's a major hit to their overall business
And wait until Apple enters the TV market. TVs are 25% of Samsung's business. The hurt for Samsung is just getting going
But Samsung isn't really making a lot of profit with TV sets. Most of the profit in the consumer electronics division stems from smart phone displays:
"Earnings at the consumer-electronics division that makes TVs jumped 66 percent to 760 billion won, exceeding the 542.5 billion-won median of the analysts’ estimates compiled by Bloomberg. The display business had a profit of 750 billion won, also higher than the 600 billion-won estimate.
While flat-screen TV sales aren’t picking up, the company is benefiting from demand for displays used in mobile devices. Operating profit at the unit making panels for smartphones, including the Galaxy models, more than tripled in the second quarter, accounting for 86 percent of earnings at the display business, according to IBK Securities Co. estimates." http://www.bloomberg.com/news/2012-07-26/samsung-profit-misses-estimates-on-handset-output-chip-prices.html
Quote:
Originally Posted by Red Oak
This cannot come soon enough. Given what I've observed with Samsung, I believe there is a 30% or greater chance the Samsung fabrication side of the business has shared confidential Apple CPU design info with their mobile team
@ $10 billion/year, Apple business is the equivalent to 20 million smartphone sales ($10B / $500 per phone). It's a major hit to their overall business
And wait until Apple enters the TV market. TVs are 25% of Samsung's business. The hurt for Samsung is just getting going
So you're freely admitting you want Apple to become a monopoly in every industry possible?
Why do you think that Samsung would want to steal CPU design from Apple? It is a proprietary design specialized for Apple hardware and software, which makes the incentive to duplicate it pretty much non-existent. Sort of ironic though how Apple has poached a Samsung engineer. Why is that necessary if they are so brilliantly awesome at superior design?
Quote:
Originally Posted by jragosta
So Samsung's blatant copying of Apple's designs cost them $1 B in fines and $10 B in lost business.
While they are picking up lots of cell phone business, much of it is at relatively low margins. More importantly, they could have picked up most of that business by coming up with their own designs that were merely inspired by the iPhone rather than a blatant copy.
Nope. Samsung mobile's profit is now greater than all other divisions profit combined. Samsung's semi profit margin was never all that great - Samsung is certainly making a killing in mobile business. Also remember Apple is a bargain hunter - Samsung is much better off without Apple.
Quote:
Originally Posted by digitalclips
I am curious ... is it possible for the design to be reverse engineered by Samsung with the third type of client?
Why would Samsung want to reverse engineer anything technology from Apple?
Quote:
Originally Posted by Neo42
So you're freely admitting you want Apple to become a monopoly in every industry possible?
Why do you think that Samsung would want to steal CPU design from Apple? It is a proprietary design specialized for Apple hardware and software, which makes the incentive to duplicate it pretty much non-existent. Sort of ironic though how Apple has poached a Samsung engineer. Why is that necessary if they are so brilliantly awesome at superior design?
Apple is one of the original ARM shares holders and one of the most knowledgable of the ARM architecture. Apple got many edge over Samsung on their chips design with help of P.A Semi and Intrinsity acquisions. It worth noting Intrinsity was responsible for Samsung's Hummingbirds design.
If Samsung was so brilliantly awesome at chip design why was it necessary for them to poach that same engineer from AMD?
How does Apple making its own chips make them a "monopoly" in that industry? I do not think the word means what you think it means.
"Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture."
GIven the architecture is ARM-based, what exactly does Samsung "archictecture"? In other words, what is the diff between type 1 and 2?
Quote:
Originally Posted by tooltalk
Why would Samsung want to reverse engineer anything technology from Apple?
For coping Apple gears and profits:
http://www.scribd.com/doc/102317767/Samsung-Relative-Evaluation-Report-on-S1-iPhone
Quote:
Originally Posted by Neo42
So you're freely admitting you want Apple to become a monopoly in every industry possible?
Why do you think that Samsung would want to steal CPU design from Apple? It is a proprietary design specialized for Apple hardware and software, which makes the incentive to duplicate it pretty much non-existent. Sort of ironic though how Apple has poached a Samsung engineer. Why is that necessary if they are so brilliantly awesome at superior design?
What you are saying doesn't make sense. If you think Apple entering the TV market makes them a monopoly in that market, seeing that Samsung outsells Apple on smartphones and currently has a bigger share of the TV market than Apple, does it mean you are OK with Samsung being a monopoly in every industry possible?
That's just screwed up.
And the CPU guy used to be the VP of design at AMD for 16 years. What's wrong with poaching him? Who do you think designs stuff at Apple? It's brilliant people - so why shouldn't they hire brilliant people?
Quote:
Originally Posted by tooltalk
Why would Samsung want to reverse engineer anything technology from Apple?
I dunno. That 250 page document that showed up in court seems to indicate they do.