Rumor: Apple taps rival Samsung to build majority of A-series chips starting next year

Posted:
in General Discussion edited December 2014
A new rumor suggests that Apple has struck a major new agreement with its chief rival, Samsung, in which the South Korean electronics maker will produce most of Apple's custom A-series processors for iPhone and iPad starting in 2015.




The unconfirmed details shared on Monday by The Korea Times claim that Samsung will become the "primary supplier" to Apple for processors to be used in iPhones and iPads, taking back share from competing chipmaker Taiwan Semiconductor Manufacturing Co. Recent estimates suggest that although TSMC is handling the lion's share of A8 chip production, Samsung is still responsible for building 40 percent of the chips in the iPhone 6 and iPhone 6 Plus.

The supposed new deal between Apple and Samsung, which is said to be worth billions of dollars, would reportedly see Samsung producing chips for the company at its plants in South Korea; Austin, Tex.; and at a plant in New York. Samsung's share is expected to grow even further in 2016 to 80 percent of Apple's chip allocation, with the remaining 20 percent rumored to be handled by TSMC.

However, Monday's rumor does contradict with earlier reports that suggested TMSC has been building up its relationship with Apple. Various reports from over the years have alleged that Apple has worked to completely remove Samsung from its supply chain.

Rumors about Apple's chip production have seemingly always been a back-and-forth affair between Samsung and TSMC. For example, another report from July alleged that Samsung would take over iPhone and iPad chip production from TSMC even sooner, starting next year with an anticipated "A9" processor in 2015.

Up until this year, Samsung was the sole supplier of Apple's custom A-series processors found in the iPhone, iPad, iPod touch, and Apple TV. In addition to being a key component supplier, Samsung is also a fierce rival, competing with Apple in a wide range of markets including smartphones and tablets. Apple first began producing its A-series chips for the iPad in 2010.

TSMC was rumored to enter Apple's chip production business for years before it finally became a reality with the iPhone 6 and iPhone 6 Plus, highlighting the uncertainty of predicting specific timeframes in changes to Apple's supply chain.
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Comments

  • Reply 1 of 57
    thttht Posts: 3,099member
    Find it hard to believe that Samsung and TSMC will have 14 nm and 16 nm FinFET volume in 2015. Both their 20 nm fabs were producing in volume just this Summer.

    It would make much more sense for them to use a refined lower power 20 nm process then go to 14/16 nm. Just too soon.

    Even Intel's Broadwell 14 nm rollout is going to be slow and excruciating across 2015.
  • Reply 2 of 57

    KOREA TIMES claims this, huh? Aren't they the same ones with all the FUD dumps about Apple's security lately?

     

    This is Samsung trying to calm investors.

  • Reply 3 of 57
    Quote:

    Originally Posted by THT View Post



    Find it hard to believe that Samsung and TSMC will have 14 nm and 16 nm FinFET volume in 2015. Both their 20 nm fabs were producing in volume just this Summer.



    It would make much more sense for them to use a refined lower power 20 nm process then go to 14/16 nm. Just too soon.



    Even Intel's Broadwell 14 nm rollout is going to be slow and excruciating across 2015.



    Broadwell's going to essentially be skipped for Skylake. They'll release a few Broadwell chips, but Intel's reported to be continuing with the Skylake launch this summer.

     

    I agree, they'll stick with 20nm with the A9 series. A8 was a tock, A9 is a tick. New microarchitecture, same process node.

  • Reply 4 of 57
    evilutionevilution Posts: 1,347member

    The fact is, Samsung makes great cheeps at a high yield and a good price.

    When they are told what to do, they do a good job, it's when they think for themselves that it goes wrong.

  • Reply 5 of 57
    lkrupplkrupp Posts: 6,782member
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    KOREA TIMES claims this, huh? Aren't they the same ones with all the FUD dumps about Apple's security lately?

     

    This is Samsung trying to calm investors.




    Yep, and they are also the ones who spread the rumor of a massive iPhone 6 recall because of bendgate. This is definitely damage control for Samsung.

  • Reply 6 of 57

    IF true ... WTF?!! :smokey: 

  • Reply 7 of 57
    relicrelic Posts: 4,735member
    disturbia wrote: »
    IF true ... WTF?!! :smokey:  

    Like what was said above, Samsung has the facilities and manufacturing know how to produce these chips in volume and quality, I don't see a problem if both parties prosper from the deal.
  • Reply 8 of 57
    Quote:

    Originally Posted by Relic View Post





    Like what was said above, Samsung has the facilities and manufacturing know how to produce these chips in volume and quality

    As do others. Like Intel (who's going to have to give in eventually as the X86 market continues to decline).

    Quote:

    Originally Posted by Relic View Post





     I don't see a problem if both parties prosper from the deal.

     

    I see a problem: Samsung prospering. Their mobile division is already under serious assault from Apple and the Chinese, I see no reason why their semiconductor business should be allowed to prop that division up.

  • Reply 9 of 57

    Next time on rumors: Apple plans to move away from using Samsung for manufacturing chips. Followed up by iTV being delayed until 2016 due to part shortages.

  • Reply 10 of 57
    gatorguygatorguy Posts: 20,267member
    KOREA TIMES claims this, huh? Aren't they the same ones with all the FUD dumps about Apple's security lately?

    No, they are the same ones that correctly reported Apple was working with TSMC on the A7 in April last year.
    http://www.koreatimes.co.kr/www/news/tech/2013/04/133_133715.html
  • Reply 11 of 57
    Quote:

    Originally Posted by TheWhiteFalcon View Post

     

    As do others. Like Intel (who's going to have to give in eventually as the X86 market continues to decline).

     

    I see a problem: Samsung prospering. Their mobile division is already under serious assault from Apple and the Chinese, I see no reason why their semiconductor business should be allowed to prop that division up.


     

    Hmmmmmmm...

     

    Sounds like you are saying that Apple should cut off its nose to spite its face.

  • Reply 12 of 57
    gatorguygatorguy Posts: 20,267member
    negafox wrote: »
    Next time on rumors: Apple plans to move away from using Samsung for manufacturing chips. Followed up by iTV being delayed until 2016 due to part shortages.
    This isn't even something new. The Korean newspapers reported back in Oct. 2013 that Samsung had won back the majority of Apple's 2015 A9 production by virtue of being first to roll out a properly performing 14nm die, well ahead of TSMC. Yeah Apple works on these contracts years in advance.

    EDIT: Here you go. Take a look at the date of this even earlier article.
    http://english.hankyung.com/news/apps/news.view?c1=&newscate=1&nkey=201307150718011
  • Reply 13 of 57

    Regardless whether this is true, Samsung the Supplier is not the same as Samsung the Smartphone competitor. 

  • Reply 14 of 57
    In an ideal world, Apple wouldn't use Samsung for anything.

    However, if Samsung end up concentrating on what they do best, it would mean less profit for them, which is a good thing. It seems as though they are going to have to accept their fate as primarily a supplier, rather than a competitor to Apple. I've put that clumsily, but I hope the gist is clear.
  • Reply 15 of 57
    chadbagchadbag Posts: 1,076member

    Always good to have multiple sources for your parts and to keep your suppliers on their toes due to competition for your business.   Sole suppliers are not great if you can avoid it.

  • Reply 16 of 57
    andysolandysol Posts: 2,506member
    Quote:
    Originally Posted by TheWhiteFalcon View Post

     

    I see a problem: Samsung prospering. Their mobile division is already under serious assault from Apple and the Chinese, I see no reason why their semiconductor business should be allowed to prop that division up.


     

    Quote:
    Originally Posted by island hermit View Post

     

     

    Hmmmmmmm...

     

    Sounds like you are saying that Apple should cut off its nose to spite its face.


     

    I'm with Falcon here.  Only if there are no other possibilities do you use Samsung.  Why give them a supportive arm of their business to help prop up their fledging problems.  A world with no Samsung is a better world.  There are plenty of good companies- or should I just simple say, not despicable, companies- out there that can step up and fill in Samsung's shoes in every division- from Semiconductors to Washing Machines.

  • Reply 17 of 57
    gatorguygatorguy Posts: 20,267member
    lkrupp wrote: »

    Yep, and they are also the ones who spread the rumor of a massive iPhone 6 recall because of bendgate. This is definitely damage control for Samsung.
    Not every Korean paper is called the Korean Times. I think Business Korea is the publication that suggested Apple might recall some iPhone 6+ units, but not because of bending.
    http://www.businesskorea.co.kr/article/7084/huge-potential-recall-technical-defects-iphone-6-raise-questions-about-controller-ic
  • Reply 18 of 57
    Quote:

    Originally Posted by Andysol View Post

     

     

     

    I'm with Falcon here.  Only if there are no other possibilities do you use Samsung.  Why give them a supportive arm of their business to help prop up their fledging problems.  A world with no Samsung is a better world.  There are plenty of good companies- or should I just simple say, not despicable, companies- out there that can step up and fill in Samsung's shoes in every division- from Semiconductors to Washing Machines.


    Because, like it or not, when it comes to component design / manufacturing Samsung is world class.  To be able to supply Apple, you have to be able to supply at massive scale, in quantity and quality.  Samsung is probably the only company right now that can go toe to toe with Intel in terms of supplying enough components to Apple.  And not just processors - you have RAM, storage, displays, etc.

     

    Don't confuse your hatred for Samsung Mobile with Samsung Electronics.

  • Reply 19 of 57
    Quote:

    Originally Posted by chadbag View Post

     

    Always good to have multiple sources for your parts and to keep your suppliers on their toes due to competition for your business.   Sole suppliers are not great if you can avoid it.


    Yes it is good to have multiple sources so long as they're capable of supplying them otherwise you have the potential of running into another GTAT situation.

  • Reply 20 of 57
    ronmgronmg Posts: 163member
    Quote:

    Originally Posted by CanukStorm View Post

     

    Because, like it or not, when it comes to component design / manufacturing Samsung is world class.  To be able to supply Apple, you have to be able to supply at massive scale, in quantity and quality.  Samsung is probably the only company right now that can go toe to toe with Intel in terms of supplying enough components to Apple.  And not just processors - you have RAM, storage, displays, etc.

     

    Don't confuse your hatred for Samsung Mobile with Samsung Electronics.


     

    Exactly. I see Apple working with TSMC as leverage to force Samsung to be more price competitive. But, if Samsung is the better company so far as quality and capability in manufacturing Apple's A-Series, then Apple should source them primarily. I hate Samsung as much as the next person, probably more-so, but I also want the best quality and reliability in my iPhones, iPads, etc. You get that with Samsung components, and that's OK - so long as Apple isn't overpaying for that quality/reliability (and so long as they have a second source with TSMC, Samsung cannot overcharge). No matter the billions in components that Apple commits to buying from Samsung, it will not save their smartphone business.

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