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Samsung reportedly lost key iPhone 7 component business

iPhone 7 Specs A10 Chip

The iPhone is a gold mine for Samsung, which is ironic considering the two companies are fierce rivals in the mobile business. The Korean giant produces various components for Apple, and it’s even working on winning some of the iPhone maker’s future AMOLED display business, according to some reports. But at the same time, Samsung is said to be missing out on a key iPhone 7 component next year.

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HSBC writes in a research note to investors that TSMC is going to be the only company to manufacture the A10 chip that will equip next year’s iPhone 7, Apple Insider reports. Previous reports also said that TSMC would  be awarded A10 chip production contract, linking Apple’s decision to the minor Chipgate issue that emerged soon after the iPhone 6s was launched.

TSMC obtained all orders for Apple’s iPhone 6 chips in 2014. This year, Samsung was initially believed to be the sole provider of A9 processors, but subsequent reports revealed Apple also contracted TSMC to make iPhone 6s chips.

HSBC says that Samsung is making 60% to 70% of A9 chips, with TSMC responsible for the remaining 30% to 40%.

Apple is now rumored to be TSMC’s first customer to use integrated fan-out (InFO) chip technology, which can help it reduce the thickness and weight of the iPhone. InFO packaging allows smartphone makers to stack chips on top of each other and mount them directly on the circuit board.

HSBC believes that the InFO chip deal could add more than $300 million to TSMC’s 2016 sales, and reach $1 billion in 2017. Overall, Apple’s A10 business could net the Taiwanese company from $2.2 billion to $2.5 billion in revenue.

A recent report suggested that Apple is interested in further shrinking the iPhone’s thickness next year. To do that, Apple reportedly plans to remove the headphone jack from the bottom side of the phone.

Chris Smith started writing about gadgets as a hobby, and before he knew it he was sharing his views on tech stuff with readers around the world. Whenever he's not writing about gadgets he miserably fails to stay away from them, although he desperately tries. But that's not necessarily a bad thing.