Samsung will reportedly supply majority of Apple’s A9 chips that will be used in next generation iPhones.
In a shocking move Samsung Electronics will now manufacture majority of the A9 chips for Apple’s next generation iPhone models, according to South Korean newspaper Maeil Business (via Reuters). A9 is going to be used in the iPhone 7.
The South Korean electronics company will become the main supplier of these processors that power Apple’s next iPhones according to sources related with the semiconductor industry.
From now on Samsung Electronics will become responsible for manufacturing 75 percent of the chips for the next iPhone. However the sources did not reveal any information about the terms of the contract and so there is no clue about how much the contract is worth.
Sources also did not reveal whether any other company will be supplying Apple or not. Moreover Samsung will start manufacturing these chips for Apple from its factory in Austin, Texas.
If anyone remembers the A8 chip was used in the iPhone 6 and the chip was only supplied by Taiwan Semiconductor Manufacturing Co or TSMC, which is the world’s largest chip foundry operator.
However this time Apple is relying on Samsung for supplying the chips. Samsung Electronics will also be supplying the application processors for its own next generation smartphone the Galaxy S6.
The next model that Samsung will showcase is probably in March 2015 and which probably will use Samsung’s own Exynos application processor. This Exynos application processor has been previously used by Samsung for part of the Galaxy Note 4 supply.
The decision by Samsung to move away from Qualcomm’s applications processors is definitely going to make a he impact and will enable Samsung Electronics to expand and extend its market presence in application processors.
This will make some very significant changes in the global chip market as Samsung accounts for about 10 percent of Qualcomm’s annual sales. So the move by Samsung could hurt some chip making companies.
Apple according to sources will now be relying more on Samsung for iPhone 6s and Apple Watch components which includes the RAM, NAND flash storage and even batteries.
Now coming to the A9 chip that will now be manufactured by Samsung Electronics, is expected to power the iPhone 6s and presumably the next generation iPad Air and iPad mini. Moreover Apple Inc. is also considering introducing a larger screened iPad Pro at some point this year although the device has been rumored to utilize Apple’s A8X processor.
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It seems that Samsung Electronics is gearing up for this year by expanding its operations even into the chip manufacturing industry. As always if Samsung keeps up to its name other chip manufacturing industries such as Qualcomm would have to pay a heavy price in the form of lower profits.