A report from Seoul’s Korea Times claim that Samsung (KRX: 005930) has secured a deal with Apple (NASDAQ: APPL) to build Apple’s next-generation SoC.
The report says that Samsung will partner with Global Foundries to ensure there is enough capacity on the supply chain for the order. This deal comes at the expense of TSMC (TPE: 2330), which developed the chips for the iPhone 6.
While this deal may seem plausible, as Apple and Samsung have been long time partners, upon scrutiny the certainty of this deal materializing is far from a sure thing. First, the Korea Times does not have a solid track record of predicting chip deals as its sources were wrong with the last two predictions. With Apple’s A7 run the paper said that Apple had abandoned Samsung entirely as a supplier in favour of TSMC, which turned out to be false. For the A8, the publication said that it would be an entirely Samsung affair — wrong again.
The other factor at play which might be a handicap to this deal materializing is the disarray that Samsung finds itself in at the moment. According to earlier reports, Samsung’s 14nm FinFET process appears to be delayed. If Samsung can’t resolve this issue with some expediency, it would have trouble securing a deal for an SoC that certainly would be made using that process node.
More details will likely be available during Samsung’s or TSMC’s next earnings call.
