As we read in mashable.com Apple’s next-generation iPhone will reportedly include a chip manufactured by its rival Samsung. As had been rumored Samsung is lined up to build the Apple A9 processor chips that will go into the iPhone 6S.
While Apple has long worked with Samsung in the past to power its smartphones, the iPhone-maker recently turned to Semiconductor Manufacturing Co, ending Samsung’s long-running chip partnership with the company last year. Samsung will start making Apple A9 processor chips at its Giheung plant in South Korea, the people said, asking not to be identified because the contract hasn’t been discussed publicly. Additional orders will go to Samsung’s partner Globalfoundries Inc., according to another person familiar with the arrangement.
From next year, this report continued Samsung will supply 80 per cent of Apple’s supply of application processors, with TSMC supplying the remaining 20 per cent. To try and win Apple’s orders for A9 chips, which are not just lucrative on their own, but can also help attract work from other companies, both Samsung and TSMC pulled out all the stops by investing heavily in their production capabilities. TSMC reportedly budgeted a record $12 billion for equipment, only for Apple to eventually decide in favor of Samsung.
Apple’s decision to turn back to the rival for supply of crucial components may vindicate Samsung’s investments in trying to grab the lead in manufacturing technology. Apple spent $25.8 billion on chips last year, accounting for 7.6 percent of industry purchases, researcher Gartner Inc. said. Supplying chips for the iPhone and its own S6 smartphone will help Samsung turn its non-memory semiconductor business from a 1 trillion won ($914 million) loss last year to a 1 trillion won gain, said Song of HI Investment.
If the rumors are true, a major order from Apple would be just what it needs to get higher growth back on track.