Samsung may produce iPhone Chips in 2018

In 2014, it was chip manufacturer Taiwan Semiconductor Manufacturing Company (TSMC) that won the entirety of the A-series chip orders. It was the first time that TSMC was tasked with the job for Apple’s processors, and the company delivered. These are the chips that have been used since then, starting with iPhone 6 and iPhone 6 plus. These smartphones turned out to be a huge success, and Apple seemed to have the number of A8 chips that they could manage to sell.

Now, a new report has emerged on The Korea Herald claiming that Samsung “recently purchased extreme ultra violet lithography machines, the most advanced chip manufacturing equipment. This is to enable Samsung to produce seven-nanometer mobile processors solely for iPhone.” It adds that “Samsung plans to complete its tests for the chip-making machines soon and seek final approval from Apple for the chip production.”

It is believed that Kwon Oh-Hyun, who is one of Samsung’s three Co-CEOs whose position oversees chip and other parts production, played a huge role in bringing Samsung back into the game. This was during his visit to Apple headquarters in June.

“The CEO could persuade Apple’s top brass taking advantage of their close ties on OLED,” an industry source stated. Samsung still works with Apple and is still the sole producer of OLED displays for Apple’s upcoming iPhone. They own about 95% of the OLED market.

Samsung was the major player in Apple’s iPhone chip production before TSMC overtook them in 2013. TSMC did this by adopting the more efficient seven-nanometer technology before Samsung could have it. According to market research firm IHS TSMC, which is the world’s No. 1 foundry firm, went on to take up to a 50.6% market share in the global chip foundry sector with its revenue reaching US$28.8 million in 2016. It was followed by Global Foundry of the US with 9.6 percent, and then Taiwan’s UMC with 8.1 percent. Samsung also held a market share of 8.1 percent during the same year. Now, with their extreme ultra violet lithography machines, Samsung seems to have the upper hand at least in the Apple deal.

Though Samsung has not been producing the A-chips for some time, they have still been gaining ground in the field, especially using their deal with Qualcomm, who are the top merchant vendors of mobile applications processors.

If Samsung manages to grab some of the A12 Fusion order, then they will be able to get an even bigger high-end mobile applications processor market through their chip manufacturing arm. This will be a blow to TSMC, which seems to be majorly relying on Apple for their new manufacturing technology.

However, the race between Samsung and TSMC is not anywhere near done. There has not been a final approval for Samsung from Apple. The Taiwan Company has been improving its 7-nanometer process and appears to be ramping up production for 2018.

If these reports are to go by, Samsung would complete its tests for the new chip-making machine soon and then share the market with TSMC after Apple’s approval.

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