Competition is heating up between Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) to build Apple’s next generation A9 chips, according to a new report citing industry sources.
TSMC is currently manufacturing the majority of the A8 chips used in Apple’s latest iPhones, thanks to a deal inked in 2013. Samsung, however, is keen to reestablish its previous position as the sole provider of Apple’s A-series chips — and is willing to lower its quotes to do so.
Samsung is also pushing the fact that it can provide other services to Apple, including the manufacture of flash memory and backend services in-house.
There’s good reason why Samsung would be so desperate to win Apple orders. Having recently posted dismal Q3 earnings — down a whopping 60% in operating profit from the same period in 2013 — Samsung needs to land a winner. And if there’s one thing Apple has reconfirmed recently, it’s that its iPhone product line is a winner!
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.
Apple will reportedly make its mind up by the end of 2014.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
17 responses to “Samsung and TSMC battle it out for Apple’s A9 chip orders”
Well, isn’t that interesting? Piss on Apple and then beg for their business. Nice.
No different than GM building cars, that kill / injury the consumer but then begs them to buy more . LOL
Samsung has several divisions. It is well known that the division that manufacture parts for Apple and others does not get involve with the competitive battles of the smartphone and tablet side of Samsung. There is nothing new to this story.
Whats your point? That Samsung really doesn’t want the business because of their Toaster division or that you had nothing relevant to say at all so you just stopped by to poo poo on something someone else said?
Edited: If you have followed Apple/Samsung disputes through the years Apple has, up to this point, separated the memory/chip/display (whatever it is called) division from that which makes smartphones and tablets. Apple wants as many potential suppliers as possible willing to do business. It’s called competition. When there is competition costs are lower. The people running Apple aren’t fools. They are not going to cut off their nose to spite their face. Apple will go with the best deal.
I agree with you ain’t nothing new at all.
Samsung is providing 23 percent of Apple battery…………..
Now thats more like it.
Samsung has invested a great deal of money in new chip fab capacity. I think it would be very fitting if Apple give the contract to TSMC instead and Samsung has to use the new facility for less profitable chips and at a lower capacity.
Depriving Samsung of revenue is only part of the equation, the other element is strengthening Samsung’s rivals, such as TSMC, who have rapidly become a major force in chip fabrication thanks to their association with Apple.
Samsung has proved to be an untrustworthy associate and cannot expect to win attractive contracts with Apple any more. Samsung’s strategy seems to be to offer low prices, but Apple might feel that it’s preferable to pay slightly higher prices to TSMC, rather than continuing to deal with Samsung. Apple is one of the biggest purchasers of chips in the world and it’s very much in Apple’s interests to have TSMC as a strong and trustworthy supplier. Samsung used to be pretty well the major supplier for Apple, but Samsung made some stupid decisions and are now facing the consequences.
No, Samsung has a proven record of providing quality and reliable parts. Ask any Mac owner which display s/he prefers. The overwhelming majority will say Samsung.
When I refer to Samsung as being untrustworthy, I’m talking about Samsung getting an inside look at Apple’s plans and then creating rival products based on those ideas. Apple’s best interests are served by ensuring that Samsung has the smallest possible insight into their future plans.
Samsung could have continued to enjoy a fruitful and profitable relationship with Apple, but they abused that relationship and are now facing the consequences. Samsung briefly enjoyed some good times, but their prospects for the future are now somewhat uncertain.
Tim Cook is a person who places a lot of emphasis on trust and honesty. Samsung need to drastically change their method of operation if they want to continue doing business with Tim Cook’s Apple. There’s nothing wrong with Samsung’s components, the problem is with their moral compass.
Apple will not abandon Samsung if it is in apple’s interest to do business with Samsung. Its not personal, its not principles, its business.
You seem to be unaware that Tim Cook is a man of principles and he has gone on record as saying that if there is a conflict between ethics and profits, ethics will take priority.
Apple has continued to do business with Samsung because there were no other suppliers who could provide the quantities and quality that Apple demands. As other suppliers up their game, Apple places contracts with them.
Nah, Samsungs parts are fine. This is just Apple not putting all of its eggs in one basket.
I may be wrong on this but…The heads up Samsung gets on the “next big thing” Apple is working is probably worth more than the chump change they make from the chip sale.
the best thing Apple could do is cut off the copycat… at all costs…
Ah but we assume TSMC are angels if given free reign. Just like Samsung seemed to be many moons ago. Still give TSMC one more production run and see Sammy squirm. Samsung’s “divisions” all report to el Capo, the pardoned one, and don’t tell me for a second that el Capo can get any info he wants at any moment from his lieutenants.