Report says ‘Chipgate’ may have cost Samsung Apple’s iPhone 7 business

 

Whenever Apple comes out to defend a potential flaw that has a “-gate” suffix — think Antennagate (iPhone 4), Bendgate (iPhone 6) or Batterygate / Chipgate (iPhone 6s) — it probably means that, yes, there’s a problem. Apple’s confirmation of the issue usually sounds reassuring, which suggests the company is working on a fix if it hasn’t already found one, which was certainly true for Antennagate and Bendgate. With Chipgate, Apple might have fixes in the works, including one that it will likely enjoy enacting: Apparently, Samsung might lose the A10 chip business to TSMC, which could be Apple’s way of preventing potential chip-related issues next year.

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This is, at least, what this week’s crazy iPhone 7 report from China claims, but looking back at iPhone 6s chip-related rumors, we can’t just ignore it. In short, last year’s rumor mill said that Samsung will get all of Apple’s A9 orders, and then reports emerged that TSMC won half of the orders. While we have no knowledge of Apple’s A9 chip negotiations with suppliers, it turns out that both companies got to manufacture A9 chips.

On paper, Samsung’s processor should have been slightly more energy-efficient and faster, since it’s built on 14nm technology compared to TSMC’s 16nm process. But that’s not entirely the case, as tests have shown.

A report from Asian news site Economic Daily News says that a JP Morgan Securities analyst predicts that TSMC will get all of Apple’s A10 chip orders for next year’s iPhone 7 series. Samsung’s underperforming A9 chip might be to blame, the analyst says.

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With almost a year to go until the new iPhone launches, and a few quarters until Apple starts mass producing the iPhone 7, it’s safe to say that anything can happen with supply lines. Samsung has recently returned to quarterly growth thanks to its chip business not its mobile division. And since the iPhone is such a hot seller, it’s likely Samsung won’t give up Apple’s iPhone 7 business without a fight.

Furthermore, Apple is known for running a tight operational ship, which includes making sure it has enough supply to support production, especially for the iPhone. It’s not clear at this point whether TSMC’s factories would be able to support Apple’s iPhone 7 chip needs, especially if the future A10 processor will be built on newer technology, say 10nm. On the other hand, TSMC did win all iPhone 6 A8 chip orders in 2014, so it’s not entirely out of the realm of possibility.

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