In early October we reported that Taiwan Semiconductor Manufacturing Company (TSMC), which is currently using its 20nm process to produce Apple's A8 processors for iPhone 6 devices, was confident that it would continue to land orders for A9 processors, which was contrary to rumors of the day stating the opposite. Even the Samsung executive quoted in other rumors never said that they actually had a signed deal in hand. Implying that it was just marketing lingo to get market analysts to see their stock more favorably. At Samsung's most recent earnings call, officials said that it was producing sample 14-nanometer chips for an unidentified customer. They said that the firm will start mass producing the wafers for the chips either at the end of the year or early 2016. The planted story in the Korean press today is basically insinuating that the "unidentified customer" is Apple. And based on that premise has created an entire rumor report with that as fact. This usually occurs when more positive news surfaces that TSMC is likely to gain future A-Series processor orders from Apple and it's happening again.
On November 11 we reported that TSMC was attempting to purchase a key plant in order to lure more of Apple's business their way. On November 12 we reported that TSMC was ahead of schedule with advanced 16nm FinFET process that could be used in Apple products in 2015 or 2016. So with rumors favoring TSMC for Apple's future business, we now see Samsung is aggressively upping their game in the press.
Today's Samsung rumor that began with an "unidentified customer" has now miraculously turned into a confirmed deal with Apple that reads as follows:
"Samsung Electronics agreed with Apple to produce application processors (APs) from next year for iPhones and iPads, sources said Monday.
The agreement means Samsung will become a primary supplier of APs to Apple, pushing its chief Taiwanese rival TSMC back to second place.
From 2016, the company will supply 80 percent of APs used in Apple devices, and TSMC the remainder.
Apple has designated Samsung as the primary supplier of its next A-series chips powering iOS devices from 2016 as the alliance with GlobalFoundries (GF) enabled Samsung to cut off capacity risk," a source familiar with the deal said.
The value of the deal is said to be worth "billions of dollars," according to the sources.
Production of the APs will start early next year at Samsung's local factory in Giheung, Gyeonggi Province, and the volume will grow as Samsung plans to use its facilities in Austin, Texas and the GF-owned factory in New York for increased output, another source said.
Did Apple really sign a deal with Samsung for 14nm processors in 2016 that would give them 80% of Apple's A-Series chip business or is it just another mythical rumor to prop up their sagging stock?
First they were rumored to have had the deal in hand in October. Now it's a fresh rumor that no, the deal was really signed in November. At some point you realize that it's just a reoccurring rumor to sell to Wall Street based on an "unidentified customer," which could be anybody or no one. So did Samsung really land a signed deal with Apple giving them the majority of their future chip business? While I highly doubt it, only time will tell.