Two of mobile’s highest-profile ‘frenemies’ are reportedly teaming up again. Bloomberg reports that Samsung will win the contract to manufacture Apple’s A9 chips for the next iPhone. Samsung made Apple’s chips for years until the two companies found themselves at war in the smartphone market and the courts. Apple turned to Taiwan’s TMSC to make its chips for the iPhone 6 and 6 Plus.
Since Apple designs its own chips, the manufacturing decision is likely based on cost, quality and turnaround time considerations. Samsung has invested heavily in its chipmaking facilities in order to stay competitive in these areas, and has licensed its 14-nanometer process technology to Globalfoundries in order to create a larger base of manufacturing facilities that use its processes. Globalfoundries will reportedly get part of Apple’s A9 business, as well.
Getting another slice of Apple’s $25 billion annual chip spend would be a big win for Samsung, which is seeing a resurgence in its chip business. For the first time, Samsung is using its own Exynos processor in flagship smartphones for North American carriers. While the Galaxy S5 smartphones used the Exynos chip in parts of Europe, it used Qualcomm’s Snapdragon processors in North America. But the S6 appears to use Exynos processors in all models.
Shannon replaces Gobi
In addition to Samsung-designed processors, the Galaxy S6 smartphones use Samsung’s proprietary modem chips to connect to cellular networks. Samsung’s Shannon 333 modem was inside the first Galaxy S6 models shipped to teardown analysts. Again, Samsung is replacing Qualcomm’s chips with its own; the Galaxy S5 used Qualcomm’s Gobi 3G/4G modem.
A Galaxy S6 teardown performed by Chipworks revealed that most of the key chips inside the smartphone are designed and made by Samsung, including the image processor, the Wi-Fi chipset, the RAM memory and flash memory, as well as, of course, the CPU and the modem.
In 2014, 29% of Samsung’s revenue came from its chip businesses, vs. 50% from sales of its mobile devices. The rest came from sales of other consumer products, everything from flat screen TVs to washing machines.
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