Apple Could Benefit as Samsung and Globalfoundries Standardize Mobile Chip Production [iOS Blog]

Samsung and Globalfoundries announced yesterday that the two companies will adopt the same chip production process as they upgrade their manufacturing facilities in preparation for the next generation mobile devices. (Via Wall Street Journal) This announcement adds credence to an earlier rumor that Apple was negotiating with GlobalFoundries to start making the A-Series chip in the company’s Malta, New York Fab 8 facility, with Samsung helping in the early stages of production.

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As part of the agreement, Globalfoundries has agreed to drop its current 14 nanometer circuit technology and will instead license Samsung’s 14 nanometer process. This standardization of production processes could have a significant impact on Apple, which can now source its A-series processors from either Samsung or GlobalFoundries without any additional engineering effort.

“What really drove us to this agreement was a strong pull from customers,” said Ana Hunter, Globalfoundries’ vice president of product management. “They see the value in really having one process where they have choice and flexibility in the manufacturing options that they have.”

Intel is the first company to start producing chips based on 14-nanometer technology with production starting in the current quarter. Apple supplier Samsung is expected to begin volume production of its 14 nanometer chips in late 2014, while Globalfoundries may introduce the process in early 2015.

There is no information on how this agreement affects Apple’s current chip manufacturing deal with Taiwan Semiconductor Manufacturing (TSMC). Apple reportedly contracted with TSMC to start producing its A-series chips in early 2014 using 20-nanometer technology. Apple turned to TSMC for its chip manufacturing needs as the Cupertino company strives to lessen its reliance on Samsung to meet its production needs. This balance of suppliers helps alleviate supply constraints that result from production problems at a single supplier.



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