As part of its additional $100 billion investment in US domestic manufacturing, Apple is entering into a chip manufacturing partnership with Samsung. The Korean company will fabricate next-gen chips for Apple at its Texas foundry.
The companies will work together to “launch an innovative new technology for making chips, which has never been used before anywhere in the world.”
Apple teams up with Samsung to make cutting-edge chips in the US
Apple uses TSMC’s cutting-edge nodes for fabricating the M-series and A-series chips inside its iPhones and Macs. While Samsung operates its own foundry, its process nodes lag behind TSMC’s in terms of efficiency and performance. The company fabricates its Exynos chips in-house, and they suffer from high power consumption and overheating issues.
Yet, Apple’s press release paints a promising picture. The chips will use a “never been used before anywhere in the world” technology and help improve the power and efficiency of Apple products.
One Korean report suggests Samsung will make ISOCELL camera sensors for the iPhone 18 at the Texas facility. But based on Apple’s wording, it seems the facility will make chips related to power management.
Over the last few years, Samsung’s foundry business lost almost all its main customers, putting its future at risk. It recently secured Tesla as a customer, and now with Apple coming onboard, the company should be in a better position to curtail its losses.
Apple bets on Samsung’s foundry despite its struggles
The move should benefit Apple as Trump plans to put a 100% tariff on chips fabricated outside the US. Local production enables Apple to secure an exemption on this, helping preserve its profit margins.
Given Samsung’s ongoing foundry struggles, it’s unclear why Apple chose it over long-time partner TSMC. The move could signal Apple’s intent to diversify its supply chain and reduce dependence on TSMC. But on the other hand, the company announced a $2.5 billion commitment to expanding its partnership with Corning. As part of this, the latter will make 100% of iPhone and Apple Watch screens in the US.
Rajesh has been closely following and writing about the latest happenings in the world of mobile for nearly a decade now. While he prefers Android, he does not deny the superiority of Apple’s products and ecosystem.
