Apple may give Samsung the boot for iPhone 7 chip orders

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apple-vs-samsung
Samsung may be passed over for iPhone 7 chip orders.
Photo: Cult of Mac

After the “chipgate” event of the iPhone 6s — in which Samsung-manufactured A9 processors were rumored to perform worse than those built by Taiwan Semiconductor Manufacturing Company (TSMC) — a new report suggests that Apple may give its South Korean frenemy the boot, and award 100 percent of its iPhone 7 A10 chip orders to TSMC.

The report comes courtesy of HSBC bank, which has raised its opinion on TSMC stock from Neutral to Buy — claiming that the company will regain 100 percent market share of Apple’s A10 production in 2016. This deal is likely to bring in over $300 million in sales in 2016 and hit $1 billion in 2017.

Should this rumor turn out to be correct, Apple’s orders will rise from 14 percent of TSMC’s business this year to 24 percent next year.

This new report backs up a previous one claiming that TSMC will be Apple’s exclusive supplier for the next-gen A10 processor, and that volume production will kick off in March 2016.

TSMC is said to have established “in-house developed backend integrated fan-out (InFO) wafer-level packaging” for the A10 production, with the chips being built using the company’s 16nm FinFET process technology.

Samsung and TSMC have spent much of the past eighteen months battling with each other over Apple chip orders. At one point, things even wound up in litigation — with a former TSMC employee charged with leaking trade secrets to Samsung.

Foxconn’s CEO Terry Gou has also gotten involved to lobby on behalf of TSMC, prompted by his fears that Samsung is taking over more and more of the available manufacturing work from Apple.

I’d be surprised if Samsung’s ready to throw in the towel just yet, though.

Source: Barrons