apple A7 chip

Samsung to Make Even More Chips for Apple in 2015

July 17, 2014 - Written By Cory McNutt

You know the old saying…”Politics makes strange bedfellows”…well so do business dealings, especially when it comes to chip and processor manufacturing.  Take Samsung and Apple – these two companies absolutely hate one another, yet they conduct a fair amount of business together.  Long before Samsung became the number one manufacturer of smartphones, they were, and still are, one of the leading chip manufacturing companies – really bested only by the Taiwan Semiconductor Manufacturing Company (TSMC), which is the world’s largest dedicated independent semiconductor foundry.  Samsung has long provided Apple and others with chips and displays for their products.  And while it is true that Apple and Samsung have spent more time in the courtroom than Perry Mason, Apple still remains a customer of Samsung.

Samsung already makes the series A processor for Apple – including the newest 64-bit A7 and will continue through 2015.  According to a recent Reuters report, KGI Securities analyst Michael Liu claims, that when it comes to the next-generation 14-nanometer processors – for both Apple and Qualcomm – “TSMC will be supplanted by Samsung” sometime in the second half of 2015.

Apple is certainly ‘in bed’ with TSMC as they try to distance themselves from Samsung, however, Apple must buy their processors from the ‘guy’ that can provide them with their specifications, in a quantity and quality that they demand and at a competitive price.  Sometimes this describes Samsung and that is whom they will deal with.  At a Q&A session at the TSMC conference, analyst tried their best to get an answer regarding the TSMC-Apple relationship, and that prompted TSMC Chairman Morris Chang to say, “We are not going to comment on specific customers.”  He did hint that, “In 16-nanometer, TSMC will have a smaller market share than a major competitor in 2015. But we’ll regain leading share in 2016, 2017 and onwards.”  Of course, that “major competitor” he is referring to is Samsung.

So even in this love-hate relationship that Apple and Samsung endure, there is somewhere some mutual respect that allows these two giants to co-exist with one another.  I doubt that Apple is ever going into the semiconductor business any time soon, so for now they will have to continue to be strange ‘bedfellows.