TSMC’s Apple A10 exclusivity damages beleaguered Samsung in myriad ways
“More Wall Street analysts are confident that TSMC will gain 100% of Apple’s chipset business in 2016,” Mihai Matei reports for G For Games. “Even more intriguing is that this exclusivity deal might spell trouble for Samsung on multiple fronts.”
“The A10 SoC will reportedly be manufactured using TSMC’s InFO technology that is not reliant on IC substrates. More and more chipset makers could adopt TSMC’s InFO packaging technology for future products, and this might lead to Samsung Electro-Mechanics (SEMCO) losing its IC substrate business,” Matei reports. “It could also force Samsung LSI to rely on TSMC for creating its own Exynos chipsets.”
Shuli Ren reports for Barron’s Asia, “[UBS] analyst Bonil Koo wrote: ‘We think the negative will come from the mobile application processors substrate business starting in H216. We believe TSMC could have close to a 100% market share in Apple’s new A processor (A10) foundry service in 2016 and use its Integrated Fan-Out (InFO) technology for packaging. With the InFO technology, we expect Apple would benefit from better performance with smaller form factors. If so, we think SEMCO would lose the IC substrates business for which it has been one of the suppliers, as InFO would not need IC substrates. We expect Fan-Out (FO) technology to be adopted over time by other application processors/system on chip (SoC) vendors, which could include Samsung LSI.'”
Shackled to Android, Samsung has no point of differentiation. Apple will continue to take unit and the rest of the profit share from Samsung in the market segment in which they compete, and the bottom feeders will continue to take unit share as well. Tizen was Samsung’s only real hope, but they couldn’t manage to pull off such a large undertaking or, really, much of anything beyond mass producing inferior iPhone knockoffs. The world now sees: iPhone is the dream. If they have to settle for an Android phone until they can achieve iPhone, they can get the same thing Samsung offers at much lower prices from myriad Chinese Android handset assemblers (who are also knocking off Apple iPhones’ trade dress left and right).
Sooner or later, even Samsung will figure out there’s no profit to be had in Android handsets.
