Apple's competitors have adopted a wait-and-see approach, pushing back smartphone chip orders as they're waiting to see the OLED-based iPhone 8 before making future plans.
Taiwan Semiconductor Manufacturing Company (TSMC) has been exclusively fabricating Apple's in-house designed mobile chips for iOS devices since 2015 and the company has now reportedly accelerated its efforts to build seven-nanometer chips in 2018.
Samsung Electronics has not been building Apple-designed mobile chips for iPhone and iPad for almost four years now, but the South Korean conglomerate is rumored to be sharing Apple orders with rival Taiwan Semiconductor Manufacturing Company (TSMC) from next year.
According to a report Tuesday in The Korea Herald, Samsung has invested in a new manufacturing facility for churning out chips fabricated on the more energy efficient seven-nanometer process technology solely for iPhone.
“Samsung plans to complete its own tests for the new chip-making machines soon and seek final approval from Apple for the chip production,” reads the report.
The company reportedly purchased extreme ultra violet lithography machines, the most advanced chip manufacturing equipment in the world, to use in iPhone chip production from 2018. Kwon Oh-hyun, one of Samsung’s three co-CEOs, apparently played a key role in securing the deal during his visit to Apple’s headquarters last month.
“The CEO could persuade Apple’s top brass taking advantage of their close ties on OLED,” said an industry source. Samsung, as you know, is also the sole supplier of OLED panels for the upcoming OLED-based iPhone model.
Rival TSMC also won a supply deal for next year’s iPhone and the reports said Samsung would share some parts of iPhone chip orders next year with TSMC.
Apple has hit hard at the accusations that its former mobile GPU supplier Imagination Technologies leveled at the Cupertino tech giant. According to the iPhone maker, Imagination's “unsubstantiated allegations” made recently in their annual report to investors are “inaccurate and misleading,” Bloomberg reported Friday.
Apple is adamant that Imagination had known for much longer that their business relationship was ending, explaining it started working with the British firm since the first iPhone was released in 2007 and stopped accepting new intellectual property from them in 2015.
An excerpt from the article:
By 2016, Apple said it told Imagination it was further diminishing the relationship by initiating a clause in its contact that allows Apple to pay a lower royalty rate for using a smaller amount of intellectual property.
By February of this year, Apple said it told Imagination it was ending the relationship altogether and would no longer be making any royalty payments as early as 2018.
Basically, Imagination'd known for two years of Apple's plans to drop its GPU blueprints.
The statement contradicts Imagination CEO Andrew Heath who told investors on a conference call this week that Apple had informed Imagination at the end of March “that they were certain” that iOS devices released in 2018 or early 2019 would no longer use Imagination's GPU designs.
He added that “we don’t accept Apple’s position” that it could build its own system and called Apple’s decision to stop making royalty payments to Imagination “unsubstantiated.”
Apple said in a statement to Bloomberg:
We began working with Imagination in 2007 and stopped accepting new IP from them in 2015. After lengthy discussions we advised them on February 9 that we expected to wind down our licensing agreement since we need unique and differentiating IP for our products. We valued our past relationship and wanted to give them as much notice as possible to adapt their future plans.
At the heart of the dispute: Apple's April 2017 decision to drop Imagination's proprietary GPU blueprints in favor of in-house designed GPUs for iPhones and iPads. The announcement shocked Imagination's investors and caused its stock to collapse more than sixty percent.
Imagination eventually put itself up for sale.
Apple, which owns a stake in Imagination, is unlikely to make an offer, according to Bloomberg.
Imagination has been arguing ever since that it would be impossible for the Cupertino firm to design its own mobile GPUs without infringing Imagination's proprietary technology.
The Cupertino firm is said to have already cut payments for licensed Imagination GPU designs from 30 cents to just 10 cents per iPhone. Analyst think Imagination will struggle to stay in business as an independent company without Apple as its key customer.
A major malfunction at one of its manufacturing facilities in Taiwan has caused DRAM chip provider Micron Technology to scrap half of the wafers produced at the plant, trade publication DigiTimes said Thursday. About 60,000 units of twelve-inch wafers have been scrapped.
The problems with nitrogen gas have caused production lines at the fab to stop temporarily, said a report from Taiwan's TechNews, without citing its source.
Research firm TrendForce said that a nitrogen gas dispensing system malfunction had led to the contamination of wafers and equipment in Micron's plant near central Taiwan.
The facility in question is known to have produced LPDDR4 RAM for iPhone devices in the past.
”The temporary shutdown of Fab-2 could have an impact on shipments of the upcoming new iPhone devices as well,” added the research firm.
TrendForce analysts base their reports on channel checks in the supply chain.
“Regarding recent rumors about Micron's fabrication facility in Taoyuan, Taiwan, Micron hereby clarifies that there was no nitrogen leaking incident nor evacuating of personnel,” Micron said in a statement to Reuters.
“There was indeed a minor facility event but operations are recovering speedily without material impact to the business.”
According to DRAMeXchange in June, the average selling price of these chips will rise five percent sequentially in the third quarter of this year as supply remains tight. The rise in DRAM prices could also be seasonal due to the expected ramp up in iPhone production during the summer ahead of new models coming in the fall.
DRAMeXchange is a division of TrendForce.
It's unclear if the incident at the Micron plant will impact Apple's launch volume targets for the OLED-based iPhone 8 and the iterative LCD-based iPhone 7s and iPhone 7s Plus smartphones.
The Cupertino company typically diversifies its suppliers in order to minimize risk.
For what it's worth, Apple has also experienced a shortage of 3D NAND flash chips for 2017 iPhones due to lower-than-expected yield rates for SK Hynix and Toshiba's 3D NAND technologies, forcing the Cupertino giant to turn to Samsung as a supplier.
iPhone 7 X-ray image courtesy of iFixit
Apple's upcoming iPhone models—the OLED-based iPhone 8 and the iterative LCD-based iPhone 7s and iPhone 7s Plus handsets—have been hit in a global shortage of 3D NAND flash chips, forcing the Cupertino giant to call on Samsung in an effort to secure more.
According to a new report Thursday from DigiTimes, the overall supply of 3D NAND flash components for 2017 iPhones has fallen short of Apple's orders by as much as thirty percent.
That's because the company's current flash chip suppliers SK Hynix and Toshiba have both experienced lower-than-expected yield rates for their 3D NAND technologies.
SK Hynix is among the bidders for Toshiba’s lucrative flash chip unit.
Here's an excerpt from the DigiTimes report:
Apple has turned to Samsung for more NAND chip supplies for its upcoming phones, since Samsung has relatively stable yield rates for 3D NAND technology and has scaled up its output of 3D NAND chips.
TrendForce estimated that supplies of the 3D NAND flash storage chip won't ease until the middle of 2018. “The NAND Flash industry’s manufacturers will continue to devote their attention to the development of 3D 64L NAND Flash technology in 2017,” said TrendForce.
In the second half of 2018, some suppliers will also begin to shift their attention towards the industry’s newer and more advanced 96L flash storage products. Samsung, Toshiba and Micron Technology are currently transitioning to 64-layer 3D NAND flash products, while SK Hynix plans to jump straight to supplying 72-layer 3D chips.
“These gradual changes are all expected to have a potentially beneficial effect on the productions of NAND Flash in 2018,” added TrendForce. “As a result, their prices could start to fall as early as next year”. However, the global supply of NAND flash chips is set to remain tight through the end of 2017.
Business Korea said that Samsung Electronics (which leads the global NAND flash market), Toshiba, Western Digital and SK Hynix are accelerating the development of these three-dimensional NAND flash chip technologies, which basically stack more memory cells than 2D chips while utilizing existing mass production facilities.
The 128GB iPhone 7 model, for example, uses Toshiba’s 3D BiCS NAND technology, which stores three bits of data per transistor and stacks 48 NAND layers onto a single die, bringing accelerated read and write performance compared to 2D flash memory chips.
The in-house designed Apple A10X Fusion chip powering the new 12.9-inch iPad Pro and 10.5-inch iPad Pro models is being fabricated on a cutting-edge ten-nanometer process technology by Taiwan Semiconductor Manufacturing Company (TSMC).
Having analyzed the processor, TechInsights was able to confirm that it's the first TSMC-built ten-nanometer chip to show up in a consumer device.
It's not the world's first ten-nanometer silicon to appear in a smartphone: a Samsung or Qualcomm-designed processor powering Galaxy S8 is built on Samsung’s 10 nm LPE process.
A detailed floorplan analysis of Apple's latest chip has revealed a die size of 96.4 mm2 versus the A9X which has a die size of 143.9 mm2 and is built on TSMC’s 16 FF-Turbo technology.
Despite its power, the A10X Fusion has the smallest die size for an iPad processor yet.
AnandTech says A10X Fusion's CPU clock speed is only marginally higher than A9X's, “and pretty much identical to A10”. Images of the chip's floorplan seen top of post and bottom reveal the chip's 12 GPU clusters on the left, along with the CPU cores to the right.
Chart via AnandTech.
“This is an impressive full node scale, when accounting for the extra CPU cores built into the A10X and extra IP blocks of the A10 vs. A9 family,” notes TechInsights.
AnandTech added:
Ultimately what this means is that in terms of design and features, A10X is relatively straightforward. It’s a proper pipecleaner product for a new process, and one that is geared to take full advantage of the die space savings as opposed to spending those savings on new features/transistors.
For those wondering, the GPU cores in the A10X Fusion chip appear to be the same Apple-customized PowerVR cores from Imagination Technologies, a British GPU designer.
As you may have heard, Apple is now developing on its own mobile GPUs to supplant Imagination-powered graphics for iOS devices.
A10X Fusion features thirty percent faster CPU performance and forty percent faster graphics compared to its predecessor, the A9X chip powering the original 12.9-inch iPad Pro.
Fabless semiconductor maker Imagination Technologies has announced it's putting itself up for sale, either in chunks or as a larger whole, just two months after Apple said it didn't want to license its mobile GPU blueprints for iOS devices anymore.
The iPhone maker accounts for about half of Imagination's sales.
The UK-based company's share price immediately fell off a cliff as a result. Imagination lost 70 percent of its value following a dispute with Apple.
Reuters reported Thursday that Imagination's board of directors has “received interest from a number of parties”.
The company said in a statement:
Imagination Technologies announces that over the last few weeks it has received interest from a number of parties for a potential acquisition of the whole group.
The board of Imagination has therefore decided to initiate a formal sale process for the group and is engaged in preliminary discussions with potential bidders.
Analysts think potential bidders could include Intel, Qualcomm, Mediatek, CEVA and various Chinese firms. It's unclear it Apple itself could be interested.
Founded in 1985 and listed in 1994, Imagination had a market capitalization of 425 million pounds, or approximately $538 million, following today's news. By comparison, the company was valued at more than 2 billion pounds in April 2012, or more than $2.5 billion.
Two months ago, Imagination started seeking buyers for its Ensigma business and the MIPS division, which it bought for $100 million in 2013. The British GPU designer said it was offloading those businesses in order to focus on its new PowerVR Furian graphics architecture.
According to UBS, Imagination's non-Apple business was worth 81 million pounds in April 2017, or about $100 million. Apple, which owns an eight percent stake in Imagination, said in April it's been working on “a separate, independent graphics design in order to control its products.”
The Cupertino firm should stop using Imagination's GPU designs within 15 to 24 months.
Apple was rumored to acquire Imagination last year, but the talks fell apart. Apple has since poached Imagination's COO John Metcalfe along with a bunch of Imagination engineers.
Without any Apple royalty contributions, Imagination could become a loss-making company.
Having put its memory-chip business on sale a few months ago, Japanese giant Toshiba said today that it has selected the consortium of Innovation Network Corporation of Japan, Bain Capital Private Equity and Development Bank of Japan as its preferred bidder.
According to DigiTimes, the aforementioned government-led consortium has presented the best proposal in terms of valuation, certainty of closing, retention of employees and maintenance of sensitive technology within Japan.
The definite agreement should be confirmed on June 28, when the consortium is scheduled to hold its shareholder meeting. The transaction, subject to customary closing conditions and regulatory approval, should close by March 2018.
Toshiba's memory semiconductor business was split from the parent company on April 1, 2017 as a wholly-owned subsidiary. Toshiba is among Apple's key suppliers of flash memory chips.
Veteran Apple chip architect Manu Gulati is now a Lead SoC Architect at Google, reveals his LinkedIn profile which states that he started in his new Google role in May.
According to Variety, Gulati has been tasked with leading the effort to build highly optimized chips for Google's Pixel smartphones in-house.
He had been spearheading Apple’s own chip developments for close to eight years.
By hiring an industry expert, Google is hoping to distance itself from the rest of the pack. Like other flagship Android devices, Pixel smartphones use Qualcomm's Snapdragon 821 processor.
This makes it harder for Google to differentiate Pixel devices from other Android phones.
“In addition to Gulati’s hire, Google is now looking to hire additional chip experts to tightly control future Pixel hardware,” Variety learned from sources familiar with the hire.
A custom chip would allow Google to develop a more secure smartphone with better camera features, advanced biometric authentication, optimized power consumption and so forth.
iPhone 7, for example, is six times faster at image recognition than Google’s Pixel phone because its 64-bit A10 Fusion chip has a highly-optimized Image Signal Processor.
And with iOS 11, Apple is integrating features like Metal 2, machine learning and augmented reality directly into a phone’s main chip, which would have been impossible if the company hadn't closely controlled chip design.
For those wondering, Apple's Senior Vice President of Hardware Technologies, Johny Srouji, oversees the company's semiconductor and wireless teams, reporting directly to CEO Tim Cook.
“Johny has built one of the world’s strongest and most innovative teams of silicon and technology engineers, overseeing breakthrough custom silicon and hardware technologies including batteries, application processors, storage controllers, sensors silicon, display silicon and other chipsets across Apple’s entire product line,” according to his bio page on the Apple Leadership website.
Johny joined Apple in 2008 to lead development of the A4, the first Apple-designed system on a chip powering iPhone 4 and the original iPad.
Apple's semiconductor team is comprised of engineers who worked at startups like P.A. Semi that Apple acquired after releasing the original iPhone. Apple's logic was simple: it wanted to take its chip destiny into its own hands to tightly integrate the hardware and software, optimize device performance and power consumption and enable hardware features simply not possible on devices that use off-the-shel parts that are readily available to all vendors.
Incredibly, the strategy paid off big time.
Even the last-generation A9 processor inside iPhone 6s smokes competition in single-core performance, for instance. The A10 Fusion chip in the iPhone 7 family is even faster and Apple's latest chip, the A10X Fusion inside the new iPad Pros, features 30 percent faster CPU performance and forty percent faster graphics than the previous generation.
Samsung's chip-making unit has been making some great strides in the past few years and now the South Korean chaebol is predicted to overtake Intel and become the world's top producer of computer chips. Should the prediction come true, this will be a major blow to Intel, which has been the leading chip maker in terms of sales for 26 years since 1991.
According to researchers with NH Investment & Securities, cited in a report by The Korea Herald, Samsung could overtake Intel as soon as this summer due to the rise in number of data centers and expanded demand of solid state drives.
Intel captured an estimated thirteen percent of global chip sales in the first quarter of 2016 versus Samsung's 9.1 percent share. But during the March quarter of 2017, Intel took up 14.7 percent while Samsung held a comparable figure of 13.4 percent.
“Starting the March-June period, Samsung's global market share of chips will surpass the 15-percent mark to outpace its rival, helped by its improved competitiveness in the memory segment,” the report added.
Apple no longer uses Samsung's chip fabrication plants to build its in-house designed processors for iOS devices, but iPhones and iPads still use Samsung-built flash memory modules and the iPhone 7's LTE modem is being dual-sourced from Intel and Samsung.
Apple has hired Esin Terzioglu, Qualcomm's Vice President of Engineering, to act as the project lead on its wireless system-on-a-chip project, suggesting the Cupertino company could be developing its own baseband modem for iPhone, iPad and iPod touch devices, reports AppleInsider.
Unlike Apple's in-house designed chips, Qualcomm's Snapdragon processors and Samsung's own Exynos chips integrate the CPU, GPU and the LTE modem on the same chip package.
iPhone 7, for instance, uses dedicated LTE modems from both Intel and Qualcomm.
“After an amazing eight years at Qualcomm, it is time for me to move on to my next adventure,” Terzioglu shared the news via his LinkedIn account.
“I feel privileged for the opportunity to continue my career at Apple,” he added.
He is credit as an inventor of many Qualcomm patents.
After joining Qualcomm in August 2009, Terzioglu lead the Qualcomm CDMA Technologies Central Engineering organization. He has a Ph.D. in Electrical Engineering with a Ph.D. minor in Computer Science, both completed at Stanford University.
Apple and Qualcomm are currently embroiled in a $1 billion licensing dispute related to the royalty fees the iPhone maker and other companies pay to Qualcomm for its cellular chips.
According to Axios, the chip maker has asked a US court to force iPhone suppliers to keep paying it royalty fees, while it continues its legal battle with the Cupertino giant.