14 DAY TRIAL // Samsung has failed to land a contract with Apple for the production of the next-generation A7 chips, which will power new iDevices starting with Q1 2014, according to sources in Korea.
Korea’s Times reports that “[Apple] has excluded its Korean rival from a project to develop A7 application processors, due to be released in the first half of next year.”
Samsung is reportedly unhappy with the decision, and plans to make up for this loss by expanding its business with NVIDIA.
However, Samsung will be hit hard by Apple’s change of heart, as “the application business is one of Samsung’s new growth engines in which the firm is heavily investing,’’ said an official from a parts supplier to Samsung.
The Seoul-based Samsung Electronics has been the exclusive supplier of A-series chips for Apple since 2010, when the A4 SoC (system-on-a-chip) was introduced with the iPhone 4.
Apple has chosen Taiwan’s TSMC to continue production of its custom silicon, according to the same report.
“Apple is sharing confidential data for its next A7 system-on-chip (SoC) with the Taiwan Semiconductor Manufacturing Company (TSMC),” said another executive at one of Samsung’s local partners.
“TSMC has begun ordering its contractors to supply equipment to produce Apple’s next processors using a finer 20-nanometer level processing technology,’’ the executive added.
Another person said, “If Samsung fails to win Apple orders for A7 chips, then some of Samsung’s system chip-manufacturing lines will be stopped. That’s a scenario Samsung really doesn’t want to see.”
The same person said the Korean electronics manufacturer is “injecting more resources to satisfy NVIDIA’s stiffer requirements for graphic chips on a contract basis to minimize the impact,” according to the newspaper.
Apple’s A7 chip is likely destined for the iPhone 6, which analysts believe will not launch this year, but in 2014.