Apple contracts with Samsung to manufacture Apple A9 processor for next-gen iPhone 6S

Apple is outsourcing the manufacturing of A9 processor which are going to power next iPhone to Samsung.

The Cupertino giant, Apple Inc. (NASDAQ:AAPL) is collaborating and doing business with its rival Korean technology giant Samsung. Apple’s super hit product iPhone will feature chip from Samsung. This is not the first time that Apple is using Samsung to make its processor, in the past also iPhone chips were manufactured by Samsung.

In 2011 after their legal battle, Apple stops using Samsung chips in all of their gadgets and devices. The business was diverted to Taiwan Semiconductor Manufacturing Co (TSMC).

Samsung will manufacture the A9 processor chips at its Giheung plant in South Korea. According to Gartner Apple spend some $25.8 billion on manufacturing of chips. So this order will surely give a boost to the manufacturing capability of Samsung which is trying to pick a big piece out of the $300 billion Semi-conductor industry.

Samsung partnered with Globalfoundries last year in the made-to-order chip business, an alliance targeting TSMC. This news would greatly hurt TSMC who was sole manufacturer of A8 series of processor which goes in iPhone6 and iPhone 6 Plus.

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Song Myung Sup, analyst at HI Investment & Securities Co, said “If the Globalfoundries quickly adopts Samsung’s most advanced technology and increases yield, it could also win orders from Qualcomm,”

Samsung and TSMC said they would invest heavily this year to put advanced production capabilities in their plants, moves that analysts said were based on the assumption they would get orders from Apple. Samsung is spending more than $15 billion to build a new chip manufacturing plant outside Seoul. Will Samsung may able to hold this contract for long will depend on the TSMC’s newer technology and price offering for the future contracts to Apple.

It is not confirm that Apple may release iPhone 6S or they may release a major upgrade in form of iPhone 7. As Apple has gone overboard in designing iPhone 6 and 6 Plus, it is very unlikely that apple will come out with a new version altogether and in all probability they are going to enhanced already hit version 6.

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