Samsung to catch up to Intel in 2014, make 14 nm iPhone 7 SoC

Samsung logoAre the world's top two smartphone makers -- Samsung and Apple -- returning to a friendlier relationship amid mutually shrinking margins and a smartphone sales chill? That's what a top Taiwanese newspaper is claiming.

Samsung to Hit 14 nm Mass Production in 2015, Make iPhone 7 SoC

After losing a reported 80 percent of its chip business with Apple by 2017 to TSMC, there's a report that Samsung Electronics has regained that business. The Korea Economic Daily reported Monday that Samsung had scored and exclusive contract to manufacture the applications processor (AP) -- the central system-on-a-chip (SoC) -- for the iPhone 7 in 2015.

The report claims Apple and Samsung Electronics signed the exclusive contract on July 14.

More interestingly the new chip will reportedly use 14 nanometer (nm) FinFET transistors. If the report and other rumors hold true, it indicates that Samsung may have caught up with Intel who is expected to launch another 22 nm refresh in 2014 and push out 14 nm chips in 2015.

Samsung and Apple are an intriguing storyline for obvious reasons, but the news that Samsung Electronics is confident it will catch up to Intel in 2015 is arguably the even bigger story here. That development has to come as a shock to Intel, who as recently as 2011 was talking trash about "far behind" ARM chipmakers like Samsung and TSMC were.

The success at racing towards 14 nm comes thanks to massive investment on Samsung's part. Samsung spent $11.9B USD on research and development, and $27.1B USD on facilities (including fab) development in 2012 -- one of the biggest budgets in the industry. Among the big ticket items were a $2B USD new SoC line in South Korea and a $4B USD addition to its Texas SoC chip line.

Samsung is already producing NAND flash storage chips near to the 14 nm node (at the ambiguous 10-19 nm node).

Margins, Unit Sales Growth Stall May Force Samsung and Apple to Cooperate

According to Goldman Sachs Group Inc. (GS) 80 percent of Apple's annual $8.8B USD budget for third party chip contracts will go to Samsung in 2013. Samsung makes much of the storage chips for Apple, plus its A5 and A6 SoCs (and their 'x' variants). TSMC, meanwhile, stole away the A4 contract business (the chip found in the iPhone 4) from Samsung, prompting some to predict a total phase-out of Samsung's partnership with Apple.

Does the new contract represent an easing of legal tensions? That remains unknown. Apple and Samsung have been rumored to be considering a settlement for some time now. However, the pair remains locked in a battle in a California federal court and in other international jurisdictions, with no settlement yet officially announced.

Samsung Display -- a separate unit -- has tried to distance itself from Apple in the wake of the lawsuits. Likewise, the semiconductor unit has tried to become "less dependent" on Apple, looking to produce chips for Qualcomm and Chinese companies.

Source: DailyTech

Tags: Apple, CPUs, Samsung

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