Apple Dumps Samsung, Gives TSMC Exclusive iPhone Chip Deal

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Apple is distancing itself more from Samsung by partnering with Taiwan Semiconductor Manufacturing Company (TSMC) to be the sole manufacturer of future iPhone processors. The deal cuts Samsung out of some serious revenue considering how popular Apple's smartphone is, and is already boosting TSMC's value.

Apple cuts Samsung out of A10 iPhone chip manufacturingApple cuts Samsung out of A10 iPhone chip manufacturing

TSMC will be using a 10-nanometer manufacturing process, according to Electronic Times in South Korea (thanks, Reuters). The reported deal will leave Samsung in the dust starting with this fall's iPhone refresh, presumably called the iPhone 7.

Samsung currently makes upwards of 70 percent of the A9 chips Apple uses in its mobile devices. Losing that business won't ruin Samsung, but the company will notice the revenue hit and it's possible chip manufacturing won't show a profit once TSMC takes over.

The loss is big enough that Samsung has gone into a state of emergency in an effort to keep its chip manufacturing facilities running. The company is now courting Qualcomm in hopes of winning a manufacturing deal for Snapdragon 820 chipsets, according to Patently Apple.

Samsung is also working on a 7-nanometer manufacturing process as a move to win back future iPhone processor manufacturing.

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Losing out on Apple's A10 chip manufacturing is a hit Samsung will definitely notice. Meanwhile, back at TSCM, it's party time.

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Dear Samsung:
Karmas is a ***** isn’t it?


Karma ain’t over yet.

Will TSMC actually be able to produce those 10 nm chips as reliably as Samsung did?


Samsung had to have seen this coming, and it’s hard to believe that they have not been working to get new contracts with Qualcomm, and anyone else for that matter, before now. Better still, not to have burnt their bridges with a major revenue stream.

And yes, BurmaYank, they’ve got to be hoping that TSCM will not be able to deliver, or match their 7 nanometer technology.


I wouldn’t cry for Samsung - they could eat Apple if they wanted. Consumer (& wholesale) electronics is only one division of the megalith.
Meanwhile I can see this Taiwan co. ruining the iPhone if they can’t make these chips correctly - Apple’s been burnt before with bad 3rd party components. Good on Apple if this works - business has no ‘morals or ethics’ so it wouldn’t be a surprise to see Apple go back to Samsung in the future - and it will be Good on Apple, again.


Ribbit Ribbit!  Its been a while since I posted, but here goes:

You’re all right to be concerned about the switch wrt TSMC ability to produce quality A10 chips in the quantity Apple needs.  Yet does anyone think Mr Cook et al would bet the company (the iPhone is what 70% of revenue?) if they had any uncertainty re this choice?  I’m sure Apple wanted real production runs of the A10 coming from TSMC and has tested them extensively for quality and reliability.

And point 2: From the obvious fact that Apple KEPT Samsung as a supplier for all this time (and presumably still will for other components) means that Apple does not cut off its nose to spite its face.  If Sammy produces the best component at a fair price, Apple seems willing to use them as a supplier.  Wrt the A10, Apple must have 100% confidence in TSMC. Now here’s the brilliance of this move (assuming that confidence is not misplaced): Now Sammy knows that they are replaceable as a supplier on a critical component of the iPhone and will have to compete with TSMC for next gen 7nm chips.  To win back this business, they will have to compete on quality and/or price.  Either way that’s a win for Apple.  Esp if the Sammy chip fab division loses $$ this year, they will most likely be doing all they can to win back Apple’s business.

Yes, its just business - which as CudaBoy points out - has no morals or ethics.

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