Galaxy S6 Sales Surge causes Apple to seek an alternate CPU provider
Apple is worried Samsung won't make enough chips for the
next iPhone because the Galaxy S6 is suddenly doing better than expected
Business Insider By Lara O'Reilly
5 hours ago
Samsung Galaxy S6 and S6 Edge smartphones will exceed
sales expectations, according to a new note from KGI analyst Ming-Chi Kuo, and
that could hurt Apple's access to the A9 processors that Samsung produces for
the next-generation iPhone. We first saw the news on Apple Insider.
Apple is worried that if Samsung's manufacturing unit
will prioritize its Galaxy range over its orders.
Samsung needs all the good news it can get — its sales
after the launch of the older Galaxy S5 models went into decline, so if the S6
range really is taking off — as Kuo says — then Samsung is likely to favor its
own phones over those of Apple.
Kuo says that Samsung is expected to raise its shipment
guidance for both the S6 and S6 Edge for the full year by roughly 40%, to 50-55
million units (up from 35-40 million units.) In the note, Kuo says the main
driver is strong demand for the higher-end Galaxy S6 Edge device, which has a
curved screen.
The success of the Samsung Galaxy S6 range is surprising
for two reasons: Both phones are expensive and are up against record-breaking
iPhone 6 and 6 Plus sales. And the Galaxy S6's predecessor the Samsung Galaxy
S5 missed sales projections by miles in large part because the iPhone 6 blew it
out of the water.
Samsung's head of mobile J.K. Shin said at a press event
earlier this month that supply of the Galaxy S6 is likely to be constrained due
to difficulties manufacturing the S6 Edge's curved screen.
Reports indicate that Samsung is contracted to build the
majority of the 14-nanometer "A9" processor chips for the next
generation iPhone. Kuo says that, partly as a result of the stronger market
response for Samsung's smartphones, Apple is looking to move nearly a third of
its A9 orders for its next generation iPhones over to another supplier, TSMC.
Another factor in the last-minute decision to recruit
TSMC, AppleInsider reports, is that another of its current suppliers
GlobalFoundries (which formed a partnership with Samsung last year to build
semiconductors) is experiencing poor results on production of its
next-generation CPU. Kuo also Apple's decision to switch to TSMC was also
fuelled by its 16-nanometer FinFET Turbo design exceeding expectations on both
yield rate and performance.
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