Samsung’s SoC business slipping as Apple chooses TSMC to bring A8 processor to iPhone 6

A8 chip

Apple and Samsung have worked together to bring the A-series processors to Apple’s mobile devices for quite some time, but it looks like that relationship is starting to crumble. More than that, Samsung is feeling the effects as the outlook for their logic chips business is reportedly not looking so good.

Based on a report from The Wall Street Journal, Samsung’s processor business is slipping, and it started with Apple choosing TSMC to bring the A8 processor to their next iPhone, the oft-rumored iPhone 6, along with other mobile devices. With the decision, Apple has directly effected Samsung’s microprocessor production business, as Samsung was previously the sole manufacturer of those chips.

From the report, Samsung executives aren’t too thrilled with what’s been laid out before them:

Samsung executives admitted on a recent conference call that the outlook isn’t so bright for this business.

“Sales and profitability from System LSI (logic chip business) worsened as demand from main customers continued to decline,” Robert Yi, Samsung’s head of investor relations said last week. His comments confirmed, albeit indirectly, how Apple’s gradual shift away from Samsung as a customer of microprocessors was eating into its profits.

Due to the change in outlook, Samsung will reportedly have to start looking into other areas to expand, especially when it comes to system chips. Specifically, the report suggests that Samsung could put a bigger focus on selling their image sensors. Samsung will also work on overall cost reduction.

It may not be all bad news, though, as another report from The Economic Daily News points further out into the future. While it may be gloomy for Samsung now, this particular report suggests that Samsung could be tapped to bring to market the next-generation A-series processor, better known as the A9.

While this is an early report, considering the A9 processor won’t even go into manufacturing until sometime in 2015, it does echo some reports we’ve heard this year that suggest Samsung and GlobalFoundries will work together to bring the 14nm A9 processor to market for a future iPhone.

The legal battle between Apple and Samsung has widely been cited as the reason the two companies have grown apart, but if the latter report pans out, then it looks like the two are working on it.

[via The Wall Street Journal; The Economic Daily News]