Samsung expects sales boost from Apple chip deal

Samsung's chip boss said supplying its 14-nanometre FinFet chips to Apple will boost its financials greatly, reports ZDNet Korea's Cho Mu-hyun.

Kim Ki-nam, president of the Korean electronic giant's semiconductor business and head of System LSI business, told reporters at Samsung's headquarters in Seoul that once the company begins to supply Apple with chips using its latest technology, profits "will improve positively".

Samsung is expected to start producing application processors (APs) for clients such as Apple, Qualcomm, and AMD, using its 14-nanometre process around the end of the year.

Kim declined to comment on when Samsung will start mass producing said chips for clients.

The Suwon, Korea-based tech giant is one of the two contract makers, the other being Taiwan's TSMC, for Apple's A8 processor that goes into the iPhone 6 and iPhone 6 Plus. The A8 is currently being made using 20-nanometre processes.

Out of the total volume of A8 chips, Samsung is producing around 30 percent, while TSMC is making 70 percent, sources familiar with the matter said.

Sources told ZDNet Korea that Samsung already has a contract in place with Apple to produce the A8's successor, tentatively named the A9, which will be made using the 14-nanometre process.

Though Samsung remains the global leader in memory chips, its contract-making division, named System LSI Business, has reported huge losses this year due to lowered volume supplied to Apple.

Apple has been steadily cutting ties with Samsung, one of its biggest suppliers of components in recent years. It cut off display supplies from Samsung back in 2012, and has turned to LG for the main batches.

Meanwhile, Samsung's declining popularity of its own brand of APs, the Exynos series, is also losing in competition against Qualcomm's Snapdragon, further aggravating the margins of its chip business.

Samsung claims that chips made using the 14-nanometre FinFet process spend 35 percent less electricity, have 20 percent more processing power, and take up 15 percent less space than their 20-nanometre counterparts. The company's 14-nanometre FinFet is manufactured in three dimensions, unlike conventional chips, which are flat. It is called "FinFet" because the gates on the chips resemble the shape of a fish's fin.

Meanwhile, TSMC, the world's largest contract chip maker, is expected to produce its next-generation chip using a 16-nanometre process.

Source: ZDNet.co.kr

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