Samsung Electronics Loses to TSMC over AP Supply for iPhone XS

Samsung Electronics has lost again to Taiwanese foundry TSMC in the battle to supply mobile application processors (AP) for the iPhone.

In September, Samsung had lost to TSMC over an original equipment manufacturing (OEM) contract for NVIDIA's graphics processing unit (GPU).

The consecutive defeats are painful to the Korean electronics giant as it has been stepping up efforts to develop non-memory semiconductors as the prices memory semiconductors have begun to fall.

According to foreign presses, including Taiwanese media outlets, TSMC was selected as the exclusive supplier of the A13 chip for the iPhone XS, which Apple is planning to launch next year. TSMC has been producing chips using 7nm FinFET processing technology from the first half of this year. The A13 chip is expected to be manufactured using the same 7nm process as A12.

In the market, some watchers predicted that Apple might split the order between TSMC and Samsung after a virus outbreak at TSMC in August, but Apple held on to TSMC’s hands.

As a result, TSMC's global foundry market share is expected to increase from 50.4 percent (in 2017, IHS Markit) to 60 percent next year, widening the gap with Samsung (6.7%). An official in the industry said, "Samsung is aiming to narrow the big market share gap with TSMC by accelerating the development of the extreme ultraviolet lithography (EUV) 7nm process, but the competition with the world dominating Taiwanese company will not be easy."