Apple has apparently put its faith in Samsung to build the A-series application processors for its next generation iPhones and iPads, according to a new report coming out of Korea.
As of recently, Samsung was competing with Taiwan Semiconductor Manufacturing Company (TSMC) to build the chips, which carry a contract said to be worth “billions of dollars.”
Unlike conventional memory chips, application processors reportedly count as logic chips and are said to carry much higher margins. From 2016, Samsung will supply 80% of the APs used in Apple devices, while TSMC will provide the remaining 20%.
A significant reason for Samsung coming up trumps in its negotiations with Apple is Samsung’s recent partnership with GlobalFoundries, which has allowed it to produce sufficient quantities of processors to meet Apple’s demands. Chip production is reportedly set to start early next year, and will take place in Giheung, Gyeonggi Province, in Austin, Texas, and New York.
During Samsung’s most recent earnings call, officials said that it is producing sample 14-nanometer chips for an unidentified customer. Considering the company recently posted dismal Q3 earnings, the Apple contract couldn’t come at a better time. TSMC, for its part, has reportedly invested heavily in the necessary equipment to build Apple’s next generation chips, which will be manufactured using 1X FinFET processes.