Last year, it was rumored that Samsung would go back to making Apple's next A9 chip on its 14nm FinFET process. This was after TSMC had already won all the A8 and A8X orders and Apple stopped making its chips at Samsung. Later it was rumored that Samsung lost most of the A9 orders, and that TSMC would go back to making at least 70 percent of Apple's new chips.
A new report from Bloomberg said that Apple will use Samsung's foundry to build all of its A9 chips, even after TSMC already budgeted $12 billion to invest in its new 16nm FinFET process technology. The A9 chips will be built at Samsung's Giheung plant in South Korea.
Apple spent $25.6 billion buying its chips last year, which represents 7.6 percent of the industry's total chip purchases, according to Gartner, a market research company. Because Apple ended its chip manufacturing contract with Samsung last year, Samsung saw a loss of almost $1 billion. The new orders from Apple could give Samsung a $1 billion gain this year.
Any additional orders will be handled by its partner Global Foundries, which has licensed the same 14nm process technology from Samsung. The partnership will give Samsung access to Global Foundries' factories in Texas, New York state and South Korea.
“If Globalfoundries quickly adopts Samsung's most advanced technology and increases yield, it could also win orders from Qualcomm."
Qualcomm has also been rumored to use Samsung's 14nm FinFET process for its Snapdragon 820 flagship chip, as well as for other lower-end chips going forward. Samsung recently tried to distance itself from Qualcomm by refusing to use the Snapdragon 810 chips in the Galaxy S6. However, it's likely that Samsung will continue to build Qualcomm's chips in its factories, as that will increase the company's revenues.
It's less costly to build the same chip with one process technology, which is why companies such as Apple and Qualcomm would prefer to build a single generation of chips at the same foundry. Business politics and more aggressive negotiations can sometimes interfere with that, but the way for a company such as Apple to limit those issues is to build one generation of chips at one foundry, and every other generation at another.
This way, both foundries would continue to compete for the same customer, and at the same time Apple wouldn't have to abruptly end its business with either one of them. Apple tends to sell its previous-generation iPhones and iPads for a couple more years after a new generation comes out, which means the foundry building its chips would still continue to receive income from Apple (albeit significantly less for those chip generations).Apple also tends to release its new iPhones and iPads in the fall, and that's when we should first see its new 14nm FinFET A9 chips. The A8 chip used the second generation Cyclone core, so the A9 may use a redesigned core based on the same ARMv8 instruction set. That means the A9 could benefit not just from the new, more energy-efficient FinFET process, but also from improvements in the CPU's own microarchitecture.