Austin: Samsung Electronics Co. will produce Apple Inc.'s next-generation chip at its chip foundry plant in Texas, the U.S. tech giant said Thursday, marking another significant deal for the South Korean tech company following its recent agreement with Tesla.
According to Yonhap News Agency, Apple announced it is collaborating with Samsung at the latter's semiconductor plant in Austin to develop a pioneering chip manufacturing technology. This technology is being used for the first time globally, as stated in Apple's press release. "Apple is also working with Samsung at its fab in Austin, Texas, to launch an innovative new technology for making chips, which has never been used before anywhere in the world," the release noted.
The technology aims to enhance the power and performance of Apple products, including iPhone devices distributed globally. Industry analysts speculate that the chip will likely be a CMOS image sensor (CIS) intended for the next-generation iPhone. Apple has historically sourced all its image sensors from Japan's Sony Group Corp., which held more than half of the market share as of last year, while Samsung Electronics was the second-largest with a 15.4 percent global market share. Samsung, however, has not confirmed specific details of the deal.
The announcement follows shortly after Samsung secured a $16.5 billion contract to provide artificial intelligence (AI) semiconductors to Tesla. A report from South Korea's Kiwoom Securities Co. last month suggested that Samsung's semiconductor business could see improved profitability by producing image sensors for the upcoming iPhone models.
In July, Samsung Electronics reported a nearly 50 percent drop in net income for the second quarter, with its semiconductor division experiencing its lowest earnings in over a year due to reduced demand for high bandwidth memory.