14 DAY TRIAL // Apple has decided to go all in on its partnership with Taiwanese chip manufacturer TSMC for the upcoming iPhone 7, thus giving up on the collaboration with Samsung that was started for the existing models.
The next iPhone’s A10 chip is thus expected to be manufactured exclusively by TSMC, with 100 percent of the production to be handled by the Taiwanese company.
The iPhone 6s and 6s Plus come with A9 chips produced by both TSMC and Samsung, but it appears that the CPU scandal, often called “chipgate,” has cost the South Korean company its place in the iPhone 7 chip manufacturer plans.
Samsung will no longer build iPhone chips
The Samsung chips installed on the existing iPhone models are said to provide lower battery life than the ones made by TSMC, and Apple’s reportedly trying to avoid making the same mistake twice for the upcoming version.
Analysts Steven Pelayo and Lionel Lin have said in a note to investors that has been published by Barron’s that TSMC will be the only company in charge of building the A10 chip, which is expected to generate an increase in sales to over $300 billion next year and $1 billion in 2017. Currently, Samsung builds around 70 percent of the A9 chips while TSMC makes the other 30 percent.
“The actual market share allocation is nearly impossible to predict, but we assumed approximately 60-70% for Samsung at A9 and 30-40% for TSMC, might flip flop with TSMC gaining the majority with the newer A10 chip. However, we now believe TSMC will likely get 100% order allocation from the A10 chips, in line with various news articles over the past few. As a result, we estimate TSMC may generate USD2.2-2.5bn in A10 revenue,” the two analysts say.
At the same time, TSMC could also become the exclusive manufacturer of A9X chips, which are currently being used on the iPad Pro, so the Taiwanese company is very likely to replace Samsung in Apple’s long-term plans.