Samsung to Supply 80% of Apple A-Series Chips From 2016?

Samsung has reportedly reached an agreement to supply 80% of Apple's future application processors (APs) from 2016, according to the Korea Times.

The agreement means Samsung will become a primary supplier of APs to Apple, pushing its chief Taiwanese rival TSMC back to second place. From 2016, the company will supply 80 percent of APs used in Apple devices, and TSMC the remainder.

As it's done in the past, Apple will design its A-series APs and Samsung will fabricate them in partnership with GlobalFoundries, says the site.


"Apple has designated Samsung as the primary supplier of its next A-series chips powering iOS devices from 2016 as the alliance with GlobalFoundries (GF) enabled Samsung to cut off capacity risk," a source familiar with the deal said.

Sources say that the deal is worth "billions of dollars". Samsung will start production early next year in Giheung, Gyeonggi Province and as volume grows it will use facilities in Austin, Texas and the GF-owned factory in New York for increased output.

At their last earnings call, Samsung revealed the company was producing sample 14-nm chips for an unidentified customers. They said mass production of wafers for the chips would start at the end of the year or early 2016.

"Samsung's logic chip business division will get the S3 line equipment back from the memory business. The year 2015 will have a half-year contribution, while 2016 should have a full year contribution from 14nm for external customers," predicts Bernstein Research.


It's also said that Samsung's partnership with GlobalFoundries will help it win more fabrication orders.

"Samsung has so far proved its capability in memory chips. Corporate clients were reluctant to depend on Samsung for logic chips. But the partnership with GF will allow Samsung to win more orders to fabricate customized chips," said an industry official.

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