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Sunday, 5 April 2015

Samsung To Produce Chips for Next iPhone

Samsung To Produce Chips for Next iPhone

Electronics giant Samsung might be manufacturing Apple's next iPhone chip, known as the A9 processor, according to Bloomberg. While Samsung isn’t commenting on the Friday report, the move could help the Korea-based company retake the lead in the business of making chips based on others’ designs.
Recently, Samsung and rival Taiwan Semiconductor Manufacturing Co. (TSMC) have been vying to be the first to mass-produce chips with transistors measured at 14 or 16 nanometers. Apple may also ask Globalfoundries, a Samsung partner, to make some of the chips.
Samsung's logic-chip division will get a further boost when it begins selling its flagship Galaxy S6 smartphone this month. That division designed and manufactured the advanced Exynos microprocessors that handle the computing functions of the S6. Samsung’s decision to go primarily with its internally developed Exynos microprocessors -- instead of with Qualcomm Inc.'s Snapdragon chips -- will allow Samsung to garner more of the sales from the Galaxy S6 than it has from its predecessors.
Prediction Comes True
Analysts have predicted for months that Samsung would win back the contract for Apple’s new chips from TSMC, which produced the chips inside the iPhone 6 and the iPhone 6 Plus using 20-nanometer chips, the leading edge technology at the time. TSMC had telling investors that it probably wouldn’t have its next-generation chip-manufacturing process ready in time for the next iPhone launch.
That left Samsung in a perfect position to go after Apple and Qualcomm, which design their own chips but outsource the manufacturing work to foundry players such as Samsung and TSMC.
We reached out to Linley Gwennap, principal analyst at the Linley Group, who told us that the speculation is moot since Apple continues to design its own processors for the iPhone.
"Samsung used to manufacture these processor chips for Apple, which does not have its own fabs," Gwennap said. "The processor for the iPhone 6 -- Apple A8 -- is manufactured instead by TSMC. For the new iPhone, the indications are that Samsung will once again manufacture the Apple-designed processor."
Dominating TSMC
The bigger story is that Samsung is currently dominating TSMC in the next-generation node (16/14nm) market, Gwennap said. "TSMC has lost the Galaxy S6 processor and the next iPhone processor, and we believe that Qualcomm and Nvidia will also build their next-generation chips at Samsung instead of TSMC," he said.
By comparison, at 20nm (last year's node), Samsung had none of these customers, but the Linley Group estimates that the company is 9 to 12 months ahead of TSMC in high-volume production of 16/14nm products, Gwennap added.
Other analysts have also speculated that Qualcomm and Apple are likely to shift substantial portions of their foundry businesses from TSMC to Samsung. If that happens, Samsung’s semiconductor division, which already brings in most of the company’s profits, could take on an even broader role in the future.

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