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Apple's iPhone and iPad chips generate 83 percent of Samsung's processor revenue

Rivals rely on each other
Tue May 21 2013, 15:07
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CHIPMAKER Samsung relied on rival Apple for 83 percent of its processor revenues in 2012.

As a semiconductor vendor Samsung is second only to Intel, however most of its chip revenues come from selling memory and controller parts. According to analyst outfit IC Insight, 83 percent of Samsung's $4.3bn revenue in 2012 came from fabbing microprocessors and other chips for Apple.

Apple has been trying to find alternatives to relying on Samsung to fab a lot of its chips. What IC Insight's figures show is that despite Samsung's own fast growing smartphone business, that alone isn't enough demand to support the huge volume of chips produced by the firm's semiconductor business.

While Samsung's chips offer good performance, both of its Galaxy S3 and Galaxy S4 smartphones use mostly Qualcomm Snapdragon chips, especially ones that have LTE radios.

IC Insights said that Samsung's overall microprocessor revenue including its own chips had grown by 78 percent from the previous year, the highest growth rate of any semiconductor firm, including Qualcomm, Nvidia and Mediatek.

Samsung relies heavily on Apple's continuing business to buy its semiconductor fab output but the firm also knows that Apple can't simply move to TSMC or Globalfoundries at a drop of a hat.

Samsung's proven process technology and the ability to deliver the volumes that Apple needs are two major factors that will ensure that the cash from Cupertino will continue to roll in for some time, even if Apple moves some of its business to other chip foundries. µ


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