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Samsung to make 80% of Apple's processors in 2015


News by Luke Jones on Monday November 17, 2014.

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Samsung has recently said that it would continue to build the bulk of Apple's processors in the coming years despite Cupertino cooling its orders this year. Many envisage a time when Apple severs ties entirely and for next year's i products the timing could have been perfect. However, it seems the company is not ready to cut a lucrative deal (for both parties) just yet as the Korea Times says Samsung has finalized a deal to build 80% of Apple's chips next year, including the current A8 and future A9 processors.

Samsung Electronics agreed with Apple to produce application processors (APs) from next year for iPhones and iPads, sources said Monday.

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.

Samsung will bring in New York-based GlobalFoundries to deal with the heavy load and will spread manufacturing between its plants in Texas and Korea the periodical claims. The Korea Times is usually solid source on Samsung and LG, but it has been known to slip in the past on this subject by suggesting Apple would ditch Samsung completely. However, considering Sammy has already been making noises the it would be Cupertino's chief supplier I tend to think this report is actually true.

While the relationship between the companies still exists, it is loosening. Last year for the A7 processer, Samsung made 100% of the chips, but in this year's A8 the number has been reduced to just 30%. TSMC has been Apple's chief supplier this year, but it is unclear whether the company can meet demand in 2015, which could mean Samsung's load increasing again.

The easy question would be, why do these enemies continue to work together? For Apple, Samsung makes the best quality chips at a cost effective price, but if TSMC can prove itself next year Cupertino may be willing to ditch Samsung altogether. That is an unlikely scenario, but there is little doubt that Apple is in the better position here. If Samsung pulls the plug on this deal, Apple will simply go to someone else and may have to pay more, but if Apple pulls the plug Samsung will lose a sizeable revenue stream to supply chips for the company.

source: Korea Times

 
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Luke Jones
Luke Jones is the Managing Editor at MobileBurn.com and is the person you need to speak to about the content on the site. Luke studied creative writing at degree level before carving out a reputation as a freelance tech writer. He settled here at MobileBurn, where he reviews devices and contributes to the news, as well as overseeing the site's content and direction.

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