Samsung aims to 'triple' chipmaking business, likely counting on Apple iPhone orders

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in iPhone
Samsung is working to triple its share of the contract chip manufacturing industry within the next five years, a company executive said on Monday -- possibly supporting rumors that Apple will add Samsung back to A-series production for next year's iPhones.




Samsung is looking to hit 25 percent marketshare by adding more clients, including a mix of big and small companies, Samsung foundry division leader E.S. Jung explained to Reuters. The goal is to become a "strong No. 2 player," he said.

The world's biggest contract chipmaker, TSMC, currently manufactures all of the A-series processors for new iPhones and iPads, and in fact controlled 50.6 of the overall contract industry in 2016 versus Samsung's slim 7.9 percent.

Samsung already has clients like Nvidia and Qualcomm, but may need a share of Apple orders if it wants to gain serious ground. The company hasn't been a significant part of Apple processor supply since the launch of the iPhone 6s in 2015, when A9 orders were split with TSMC.

Last week reports said that Samsung has already secured some orders for A-series processors due next year. Publicly, the company has only confirmed that it will start using extreme ultraviolet lithography to produce 7 nanometer chips in the second half of 2018 -- possibly just in time for an "iPhone 9," though it would still have to compete with TSMC.

Comments

  • Reply 1 of 11
    Herbivore2Herbivore2 Posts: 362member
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
  • Reply 2 of 11
    melgrossmelgross Posts: 31,330member
    We’ve already read in a couple of places that the DigiTimes assertion that Apple is going to move some SoC production back to Samsung next year is false. Let’s not repeat that rumor, please.
    watto_cobra
  • Reply 3 of 11
    melgrossmelgross Posts: 31,330member
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
    That’s not a positive thing. Why would Apple want to rely on one OEM for so much of its production? They wouldn’t. The only reason they would do that is because they have no choice. Since they have a choice in SoC production, they have made it. They don’t even want to entirely on Samsung for OLED production.
    randominternetpersonlongpathjony0watto_cobra
  • Reply 4 of 11
    tmaytmay Posts: 3,386member
    melgross said:
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
    That’s not a positive thing. Why would Apple want to rely on one OEM for so much of its production? They wouldn’t. The only reason they would do that is because they have no choice. Since they have a choice in SoC production, they have made it. They don’t even want to entirely on Samsung for OLED production.
    Imagine the ongoing conversations with Intel that Apple has had over the years about being a custom ARM fab. Now imagine a "sky's the limit" ARM SOC on an Intel process with integrated modem and Apple's GPU/AI/AR coprocessor designs. I'm thinking that Intel might want to get out in front of the Post PC world by building the first desktop class ARM processors. Its all about Intel's margins at this point in time, and deprecating x86/x64.
    longpathjony0
  • Reply 5 of 11
    lkrupplkrupp Posts: 6,607member
    No, you are all wrong. Samsung is ramping up production so it can take up the slack when Apple falls on its face with the next round of iPhones. This is for Samsung to be able to make more phones when people stop buying iPhones. This is a fact not in dispute. <s>
    tmayjony0anton zuykov
  • Reply 6 of 11
    melgrossmelgross Posts: 31,330member
    tmay said:
    melgross said:
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
    That’s not a positive thing. Why would Apple want to rely on one OEM for so much of its production? They wouldn’t. The only reason they would do that is because they have no choice. Since they have a choice in SoC production, they have made it. They don’t even want to entirely on Samsung for OLED production.
    Imagine the ongoing conversations with Intel that Apple has had over the years about being a custom ARM fab. Now imagine a "sky's the limit" ARM SOC on an Intel process with integrated modem and Apple's GPU/AI/AR coprocessor designs. I'm thinking that Intel might want to get out in front of the Post PC world by building the first desktop class ARM processors. Its all about Intel's margins at this point in time, and deprecating x86/x64.
    This is different. I agree, I’ve also said this many times. It should make US wonder if there are conversations between Apple and intel around these points. I would be shocked if there weren’t. Possibly Apple is waiting for intel to get fully onto 10nm, or perhaps build up a plant able to process ARM. I guess there’s just no way for us to know.

    its interesting to see this year’s A10x because of these reasons. This is on 10nm, is about 96mm2, vs 145mm2 for the A9x, yet, it includes an additional performance and an additional efficiency core. That’s a very large drop in area, leaving a lot of room for - something. We also know that Apple has been trying to get Qualcomm to allow them to built the radio (often called a modem, incorrectly) on the SoC silicon, unsuccessfully. I suspect that if Apple and intel get together, then their newest radios, which cover all the frequencies and have speed at least equal to Qualcomm’s, would be allowed on the SoC.

    thinking about why intel would be interested, we can look to the Microprocessor Reports estimate that Apple’s newest SoCs, year after year, cost between $34-38. The top Qualcomm and Samsung SoCs cost between $25-28. So these are expensive, by ARM SoC standards. If Apple sells 150 million flagship phones in the year, and 25 million flagship iPads, that’s 175 million SoCs (with the iPad x versions costing somewhat more) costing about $6 billion on the low end of estimates, or $7 billion on the high end. If this accumulates over the years, with SoCs dropping somewhat in price over time, then estimates run as high as $9 billion a year, more over time if Apple’s sales increase.

    apple would also pay charges for Intel’s radios, how much I’m not sure, but I think it’s around $6. So add that in, and it’s easy to see why any company would be interested in this business.
    watto_cobra
  • Reply 7 of 11
    lkrupp said:
    No, you are all wrong. Samsung is ramping up production so it can take up the slack when Apple falls on its face with the next round of iPhones. This is for Samsung to be able to make more phones when people stop buying iPhones. This is a fact not in dispute. <s>

    Actually, Samsung saw the beast of a chip that Apple has designed and realised that each Galaxy will need 3 chips to compete with the iPhone. Hence they are tripling!
    watto_cobraanton zuykov
  • Reply 8 of 11
    anton zuykovanton zuykov Posts: 1,031member
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
    Apple already dominates smartphone computing industry.
    As for Sammy pulling away from TSMC or dominating anywhere in a fiery hot market (yes yes, I know) - we can talk about that too...but only AFTER they accomplish that!

  • Reply 9 of 11
    anton zuykovanton zuykov Posts: 1,031member
    melgross said:
    Samsung can offer something TSMC cannot. A package deal with their OLED display panels and cutting edge v-NAND memory product. 

    Samsung is going to pull away from TSMC also in foundry capabilities. 

    Samsung and Apple are going to dominate the mobile computing industry. 
    That’s not a positive thing. Why would Apple want to rely on one OEM for so much of its production? They wouldn’t. The only reason they would do that is because they have no choice. Since they have a choice in SoC production, they have made it. They don’t even want to entirely on Samsung for OLED production.
    Leveraging different options is a key component of the strategy that sets lower prices. You don't get that when you commit yourself to a single "partner".
  • Reply 10 of 11
    ksecksec Posts: 1,543member
    1. Intel's Process and packaging is simply not well tuned for Mobile SoC. You wont suddenly get an technical advantage by using Intel's node.

    2. Intel doesn't have the capacity to Fab Apple SoC, as strange as this may seems. They could expand their Fab, but you would have known these from previous IDF or shareholders meetings.

    3. Intel's Modem is still manufactured in TSMC. So it is actually easier to use Intel Modem within the same Apple SoC then Apple jumping to Intel's Fabs. 

    4. You dont want to bet on a single supplier for commodity components like NAND and DRAM. Unless they are unbelievably cheap or sold at below cost. But given Tim Cook's management style he will likely wanted more choice rather then absolute low price. Afterall NAND and DRAM is only part of the BOM puzzle.   

    5. There is a reason why Foxconn, with funding from Apple are actively expanding their Product Line from OLED with Sharp and likely NAND from Toshiba, assuming the buy out go through.  
  • Reply 11 of 11
    melgrossmelgross Posts: 31,330member
    ksec said:
    1. Intel's Process and packaging is simply not well tuned for Mobile SoC. You wont suddenly get an technical advantage by using Intel's node.

    2. Intel doesn't have the capacity to Fab Apple SoC, as strange as this may seems. They could expand their Fab, but you would have known these from previous IDF or shareholders meetings.

    3. Intel's Modem is still manufactured in TSMC. So it is actually easier to use Intel Modem within the same Apple SoC then Apple jumping to Intel's Fabs. 

    4. You dont want to bet on a single supplier for commodity components like NAND and DRAM. Unless they are unbelievably cheap or sold at below cost. But given Tim Cook's management style he will likely wanted more choice rather then absolute low price. Afterall NAND and DRAM is only part of the BOM puzzle.   

    5. There is a reason why Foxconn, with funding from Apple are actively expanding their Product Line from OLED with Sharp and likely NAND from Toshiba, assuming the buy out go through.  
    1 You don’t know what intel is doing. If they are going to want to do mobile, they will. This isn’t an either/or thing.

    2 Intel is big enough, and has more chip plants than anyone. They can do both.

    as for the rest, yes I agree.
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