Pro-Samsung paper: Apple excluded Samsung from A7 chip production

By , Apr 10, 2013

Apple A7 (bite me Samsung)

We’ve been hearing lots of rumors claiming that Apple is taking its lucrative chip biz contract away from Samsung in the final sign that the partnership between the two firms on parts has all but fallen apart. What’s really interesting this time around is that a Korean publication that typically favors Samsung now claims that Apple has excluded Samsung entirely from its next-generation chip development project.

That’s a major development knowing Apple’s been paying billions of dollars to the Galaxy maker’s semiconductor arm to manufacture iDevice processor, using Apple-designed silicon blueprints…

Today, an executive at one of Samsung’s local partners in Korea told The Korea Times by phone:

Apple is sharing confidential data for its next A7 system-on-chip (SoC) with the Taiwan Semiconductor Manufacturing Company.

TSMC has begun ordering its contractors to supply equipment to produce Apple’s next processors using a finer 20-nanometer level processing technology.

An official of another top-tier parts supplier to the Korean company told the paper:

Apple is cutting the use of Samsung displays for its products. Now the deterioration of ties has expanded to chips. You should remember that the application business is one of Samsung’s new growth engines in which the firm is heavily investing.

The report goes on to note that Samsung could stop some of its chip-manufacturing lines should it fail to win Apple orders for A7 chips. The Galaxy maker is apparently now dedicating more resources toward satisfying Nvidia’s “stiffer requirements” for graphic chips on a contract basis to “minimize the impact.”

A report Monday by Financial News, South Korea’s daily newspaper, appears to corroborate The Korea Times story. According to that paper, Samsung Electronics reportedly plans to resume its investment in the line-17 system semiconductor plant located in Hwaseong, Gyeonggi Province, within April.

Samsung had halted the investment in expanding that facilities about five months ago, most likely due to Apple’s preparation to procure system semiconductors from companies other than Samsung, the report has it.

“The company may have decided to resume the investment in order to prepare for its rebounding semiconductor sales,” according to a human-translated version of the story.

Global semiconductor material market shrunk two percent year on year in 2012, according to iNews.

Last month, it was reported that Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading independent semiconductor foundry, finalized production designs for Apple’s in-house engineered A7 processor.

Samsung Austin plant
Samsung’s multi-billion dollar semiconductor plant in Austin, Texas so far has been dedicated exclusively to fabbing Apple chips. That might change beginning with 2014.

Risk production will apparently start this summer and TSMC should be able to churn out the A7 chips in volume in early-2014, in time for a 2014 wave of iPhone, iPad and iPod upgrades. The Apple-designed processor is expected to be fabbed on TSMC’s sophisticated 20-nanometer process technology.

Shortly after, a Seoul-based broadcasting unit of Money Today, followed up by citing an unnamed Samsung Electronics official who said his firm didn’t receive an order for 20-nanometer chips from Apple for the next year’s iPhone upgrade. As a result, internal tension inside Samsung is rising.

Note these reports insist on referring to Apple’s 2014 mobile processor as the A7.

This could mean two things: either the engine powering the upcoming iPhone 5S, a rumored budget iPhone and possibly new iPads will be branded as an A6 variant to indicate a specs update rather than a major architectural refresh, or Asian media got it wrong.

iphone 4s a5 chip

With the release of the iPhone 5 in September 2012, Apple debuted the then brand new A6 chip which claims a twofold CPU and GPU increase over the previous generation. At the same time, the fourth-generation iPad debuted a month later with the A6X variant incorporating speedier quad-core graphics.

With twice the GPU oomph of the iPad 3′s A5X chip, the A6X silicon really shines in graphics-intensive applications, making 60 FPS action and high-resolution Retina textures in games a reality.

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  • RarestName

    I thought that people said Samsung would do fine even without Apple, so why is Samsung complaining and panicking now?

    • http://www.facebook.com/leonodobasic Feđa Jebivetar

      Nobody is panicking nor complaining. However, Samsung does appear to be losing an important client, and with that, their profits will, undoubtedly, go down. On the flip side, I sincerely doubt their entire business relies on Apple. Both will do just fine.

      • RarestName

        The thing is, how much profit will they lose? According to other people, they’re just meagre profits.

      • http://www.idownloadblog.com/author/dujkan Christian Zibreg

        Apple contract for all Samsung parts at its peak was worth circa nine percent of Samsung revenue

      • RarestName

        That’s really a lot!

      • felixtaf

        “These grapes are sour” – Samsung. lol..

      • Kurt

        I think it was 8 billion in profit. Not sure if that was at it’s peak but I believe it was.

      • CrAppleJinxer

        Do you have any idea what just Samsung’s Electronics Division takes in yearly in revenue? Are you saying that just that division, which will take in over 200 Billion Dollars alone this year (estimates are as high as $230 Billion) will lose around $20 Billion in business? Samsung Electronics is the #1 Electronics Corporation on the planet by both volume and revenue, far overshadowing Apple.

        If you included the entire Chaebol (like Saudi Royals) and the myriad of Joint venture around the globe, that are not even claimed by the Chaebol, let alone Samsung Electronics Division, they are worth a whole lot more than Apple. We’re not talking about some two bit totally outsourced Design House like Apple is.

        Where since it’s a publicly traded company, unlike Samsung with limited holdings held publically by non-chaebol public, do they get they can inflict that much damage on Samsung. I mean that sounds way off. Especially if you’re counting all of Samsung which there are no legitimate estimates, much like there aren’t any for the Saudi Royals, with both being privately held Mega Corporate Conglomerates! ,,,,,no way Apple is on the same level Samsung or Saudi Royals, no matter what you fools believe!

        Samsung has invested over $12 Billion in their Austin Texas Semiconductor plant over just the last 3yrs. Which has them as the Top Corporate Investor in America 3yrs running, according to CiCi Awards. Where is Apple on that list? Down around 40 to 45! lol… BTW…. they don’t just make chips for Apple there either. It’s primarily a memory fab and they just started putting in SoC fab lines around 4yrs ago.

        They also fab chips for TI, Nvidia, Qualcomm, Broadcom and other Design House only so called chip makers!

      • chris125

        I am sure they will now be able to get other customers and not have to have the bottom line profits like they had with apple

    • http://www.facebook.com/tafk1 Taf Khan

      Because they are crying little b!tches! They deserve what the get. Besides, now they won’t be able to copy..

      • http://www.facebook.com/PwnHkr Dylan Lane C. Knox

        how little people know.

    • http://twitter.com/chyang888 C Yang

      Apple order represent 50% volume of Samsung’s contract chip manufacturing business. While Apple order will represent about 2% of TSMC’s total output.

  • http://twitter.com/HeitorStifler Heitor Castro 

    Samsung fanboys used to say: “Take it easy, Apple fanboys, our gadgets are made of cheap plastic but your main hardware it’s made by Samsung”. Now what?

    • Kurt

      But, now its a negative that our hardware like the processor/ram/and screen isn’t made by Samsung. they make the best of those. Especially the screen. Fanboys shouldn’t be happy about this. We have to face it, we are getting an inferior product now.

      • felixtaf

        You cant call TSMC for inferior products. Qualcomm, Conexant, Broadcom, Marvell, NVIDIA, VIA etc are customers of TSMC.

      • Kurt

        why didn’t you mention the screens?

      • felixtaf

        Wats wrong with the screen? Does it have to be Samsung to look good. I heard iPhone 5 screen was manufactured by Sharp. It wasnt bad…

      • Kurt

        There have been numerous articles written about it. Nevermind.

      • felixtaf

        Nevermind…

      • Kurt

        “SAMSUNG SUCKSSSSSSSS”

      • felixtaf

        Wonder y u said that… I never wanted u to admit that Samsung sucks…

      • Kurt

        I just wanted up votes :P

        Just being silly. It wasn’t because you said it

      • felixtaf

        lol

      • http://www.facebook.com/saeed.ghattas.5 Saeed Ghattas

        Here’s one more : Samsung sucks!!!

      • Raj

        Wanted up votes ??? Com’on don’t sell your prestige and get up votes. You are ignored now from this blog.

      • Kurt

        aw-shucks

      • http://www.facebook.com/PwnHkr Dylan Lane C. Knox

        what is this, facebook?? lol

      • Kurt

        I was just kidding about wanting up votes. Just in case you thought I was serious.

      • http://www.facebook.com/PwnHkr Dylan Lane C. Knox

        i figured as much

      • felixtaf

        I think u are talking about AMOLED vs LCD… That debate wont have an end…

      • Kurt

        Actually, Samsung LCDs vs LG LCDs for iDevices, and Macs

      • felixtaf

        Am not a techy… To me it looks good (Doesnt mean better or worse than Samsung LCDs)

      • http://www.facebook.com/tafk1 Taf Khan

        So how sour are the grapes u are sucking on Kurt? :P

      • Kurt

        So you are another, lets have inferior components as long as Samsung isn’t our supplier? Fanboyism at its worst lady and gents

    • http://www.facebook.com/tafk1 Taf Khan

      Haha.. comment of the day! 100+

  • ryanq

    Quad core a7x anyone?

    • http://www.facebook.com/saeed.ghattas.5 Saeed Ghattas

      No matter what it will be, it will be fast. Don’t care about those fancy specification. Keep that to the lagy Samsung products!

  • http://twitter.com/klouud Timothy Polumbo

    iPhone 4 = A4, iPhone 4S = A5, iPhone 5 = A6. Hopefully the next iPhone will get an A7 or it will lag behind the up-and-coming iPad in terms of brute force. Normally the iPhone gets the base model processor and the iPad gets the beefy AX version – lets hope Apple sticks with that. If not… I may be keeping my iPhone 4S for another go-round.

  • pauleebe

    This is probably the biggest blow to Samsung out of this Apple vs. Samsung fighting.

  • http://twitter.com/El_Barto_01 El Barto

    Never bite the hands that feeds you…others may also do the same…..plus the “impending” nuclear war that they face….

  • Damian W

    Finally, away with this samsung bs. Now they wont copy so fast.

  • chris125

    hopefully they can keep up with demand unlike their other suppliers with the screens that had everyone wanting the version with samsung screens on their ipads/macs

  • http://www.facebook.com/larrain1 Martin Larrain

    Don’t worry guys are North Korean friends are going to take care of this company called Samsung lol

  • http://www.facebook.com/PwnHkr Dylan Lane C. Knox

    Well we all knew that was coming.