Serial Apple-copier Samsung lands Apple A9 chip stamping deal

“Apple is discovering it’s harder to split from Samsung than it would like,” Dawn Chmielewski and Ina Fried report for Re/code.

“With the iPhone 6, Apple found an alternative supplier for many of the A8 chips that lend the smarts to its smartphones,” Chmielewski and Fried report. “While Apple had hoped to rely more heavily on Taiwan Semiconductor Manufacturing Co. to fabricate the Ax family of processors used in its iOS devices, the company has turned to Samsung for its next-generation A9 chip, according to people with knowledge of the situation.”

“That’s because Samsung holds a technological edge over TSMC when it comes to the latest manufacturing process. Samsung has managed to shrink the size of the transistors on its chips to 14 nanometers — effectively packing more processing power into a smaller space and consuming less power. TSMC is still at 20 nanometers,” Chmielewski and Fried report. “Samsung has invested a staggering sum — $21.4 billion — to ramp up capacity in its semiconductor and display businesses over the last year, and plans to spend even more in 2015. The company has foundries in South Korea and in Austin, Texas. Samsung also partnered last year with GlobalFoundries to bring its 14-nanometer process to its facility in Saratoga Springs, N.Y. [sic*]”

Read more in the full article here.

MacDailyNews Take: Here’s Al Pacino as Tim Cook:

*GlobalFoundries’ Fab 8 is actually in Malta, NY, situated in the Luther Forest Technology Campus (LFTC), in Saratoga County, NY about 15 miles south of Saratoga Springs, NY. LFTC’s press office is in Saratoga Springs, NY.

25 Comments

  1. Fool me once, shame on you. Fool me twice, shame on me. At this point, Apple only has themselves to blame for Samsung copying them so exact. It’s like a woman in an abusive relationship. She knows the guy is going to beat her, but she says she loves him (in this case the savings of money) and knows he can change and keeps going back for more.

    1. GlobalFoundries does not do SoCs very well at all. So the only real choice is between TSMC and Samsung, but only Samsung of those two has plant in USA. It is much more politically important to have at least half of the SoCs produced there than to fully part ways with Samsung.

      1. Even the likes of Broadcom, MediaTek and Marvell are all TSCM customers since GlobalFoundries can not effectively do the process for this type of chips; it is not their market.

        Similarly Toshiba is great in semiconductor business, but only in manufacturing memory, not processors.

  2. Behavior Modification:

    Reward the good Samsung with lucrative component contracts.

    Slap around the bad Samsung with large screen 64-bit iPhones.

    In time a smaller Samsung will be just a component supplier, and Apple’s bitch.

    There are many ways to win, you know.

      1. I suppose if you consider the Korea specific innovations like a kimchee storage drawer in their fridges that prevents stinking up the rest of the appliance and the agitator in the top load washing machines that move up an down in addition to the usual alternating rotation, among others, they have a few products out that no one bothers to copy. 😛

  3. Cook could have easily afforded to buy the fabs Apple needs with any number of partners other than Samsung. I guess he would rather piss away money on watches and crappy headphone companies built upon stolen Intellectual property.

    1. So, DavGreg, you are an elite semiconductor engineer with decades of design and fab experience with which to challenge a decision by Tim Cook, who is probably the most highly respected sourcing and component logistics guy IN THE WORLD?

      No, I didn’t think so. So, let me explain that you cannot “easily buy the fabs” needed to do the A9 chip with its 14 nm design. The only company in the world who can do this, at the high quality levels and massive numbers that Apple demands, is Samsung. Period. I know that the world looks much simpler from your mom’s basement, and you imagine that money solves everything, but in the real world where Apple is creating one of the most tech-competitive devices that exists, it can’t just buy a factory and make the chips.

      If you get this, please explain it to MDN, because SteveJack’s utterly simplistic notion of what it takes to make chips like the A9 drives me nuts.

          1. Process and hardware patents have a much longer history than software and look/feel.. Probably makes a difference in cases when you have a larger number of prior examples to work from.

      1. 1-Fabs have been for sale the last couple of years and Apple could have easily afforded one.
        2-Just like with PA Semi and others, Apple could acquire any engineering talent it needed.
        3-What screaming need is there for Apple to do a die shrink right now?
        4-Don’t be such an insulting fanboi. The jury is still out on Tim Cook who is still selling products planned before his elevation to CEO. Cheapened Mac minis, castrated Mac Pros and overpaying for a headphone brand are not encouraging signs.
        5-My home does not have a basement- BTW.

        1. Please identify the fabs that have been for sale in the last couple years that: 1) Have the capacity to pump out 250 million or more CPU chips; 2) Come with the patents and tech to do 14 nm (or even 20 nm) dies; 3) Include existing on-site talent with successful experience at astronomically high run rates.

          Yeah, I didn’t think so. In any case, owning the means of production – except in limited assembly cases such as the Mac Pro – is not Apple’s current business model. But since you must have years of experience running a highly profitable multi-billion dollar global high tech corporation, maybe you should introduce yourself to the Apple BOD and suggest that you take over from Tim Cook and fix the company.

  4. “Apple is discovering”. Total BS. Apple has known for some time that Samsung was likely to remain in the supply chain for both political and technology and financial reasons. This is called supply chain.

    Once again, either poor writing and/or clickbait.

    1. You’ve hit the nail on the head.

      In order to get this enormous Apple contract, Samsung would have had to pitch in at a price that is very advantageous for Apple. If Samsung had not won this contract, TSMC would have been awarded even more lucrative contracts from Apple.

      Samsung has invested well over $20 billion in it’s manufacturing facilities and it needs large customers and it also needs to ensure that rivals cannot easily catch up with them. They really have to win contracts with Apple and Tim Cook knows that.

      1. Seems a combination of factors made Samsung the ‘better’ choice despite Apple’s misgivings. 14nm process, volume scaling, U.S. facility, etc. It’s possible Apple weighed not being able to produce enough ‘good’ chips per wafer vs hurting Samsung. Samsung probably also has leverage of being the ‘best’ partner for producing chips at 14nm for Apple and it wouldn’t hurt to consume Samsung 14nm production so that other OEMs can’t buy in sufficient quantities.. 😛

  5. I think Apple can get the same quality of chips from elsewhere but the problem is volumes. The devices they ship has been increasing exponentially and Samsung seems to have the ability to ramp up production or move production capacity from Galaxy series phones which has been declining.
    Maybe Apple will become a silent investor in fab units to counter Samsung, which they can easily do instead of buying worthless companies like Beats for 2.5 billion dollars more than they are worth.

    1. Agreed that Apple could become a silent investor in fab units. But then who would coordinate all those smaller companies to make sure all the chips are of sufficient quality? Seems more of a headache to me. Also must consider that smaller fabs may be more volatile to going out of business since they cannot make economies of scale like the larger ones.

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