Smartphone manufacturers Apple and Samsung reach milestone agreement
Long-time rivals Apple and Samsung have come to a multi-billion dollar agreement, whereby Samsung will become the primary supplier of application processors for Apple from 2016 onwards.
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The chip manufacturing agreement will see the Korean tech-giant manufacture 80 percent of the application processors needed by Apple. Taiwan-based TSMC will handle the remaining 20 percent, despite currently handling most of Apple’s chip manufacturing needs.
Apple will continue to design its processors, while Samsung will handle production of the 14nm chips in partnership with California-based semiconductor manufacturer, GlobalFoundries.
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Application processors are significantly more profitable to manufacture than flash memory - another Samsung staple in demand from Apple. The revenue stream will allow the Korean company to make up for the declining profits from its smartphone operations.
The deal came shortly after Apple and Samsung agreed to drop all lawsuits against one another outside the US.