In rare alliance, Samsung to build iPhone chips at US fab
Samsung Electronics is set to produce chips for Apple's iPhone at its US fabrication plant, marking a rare partnership between the smartphone archrivals and raising hopes for a rebound in Samsung's loss-making logic chip business.
Apple revealed Wednesday that Samsung will manufacture the chips at its plant in Austin, Texas, which will be used to optimize performance for its flagship iPhones.
'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,' Apple said in a statement.
'By bringing this technology to the US first, this facility will supply chips that optimize the power and performance of Apple products, including iPhone devices shipped all over the world.'
The unexpected collaboration is part of Apple's latest investment under its American Manufacturing Program, bringing its total commitment to $600 billion over the next four years to bolster supply chain resilience and advanced manufacturing in the US.
Samsung declined to comment on the partnership, but industry experts expect the company to supply image sensors for future iPhone cameras.
Park Yu-ak, an analyst at Kiwoom Securities, wrote in a July report that Samsung's semiconductor division is expected to narrow its operating losses by beginning mass production of image sensors for Apple's iPhone 18 next year and securing new clients such as Tesla.
Samsung's System LSI division, which oversees logic chips, produces CMOS image sensors under the ISOCELL brand. The company currently supplies the sensors to its Galaxy smartphones, as well as to China's Xiaomi, Vivo, and Motorola.
Apple has so far sourced all image sensors for its iPhones from Japan's Sony. The new partnership with Samsung is seen as an effort to diversify its supply chain.
With Apple shipping over 200 million iPhones annually, Samsung is expected to narrow the gap with Sony, the global leader in the image sensor market. Last year, Sony held a 51.6 percent market share — largely due to its supply deal with Apple — while Samsung followed with 15.4 percent and China's OmniVision with 11.9 percent.
The deal with Apple, following Samsung's recent $16.5 billion chip supply agreement with US electric vehicle maker Tesla, is also expected to boost prospects for a turnaround in the company's struggling System LSI and foundry divisions.
In the second quarter this year, Samsung's logic chip and foundry divisions are estimated to have posted an operating loss in the high 2-trillion-won ($1.4 billion) range.
The System LSI unit has struggled with sluggish adoption of its in-house application processor for smartphones, the Exynos, as well as stagnant market share in image sensors. The foundry unit has continued to post losses due to yield issues and order declines.
According to market tracker Omdia, the global CMOS image sensor market is projected to grow from $20.8 billion in 2024 to $26.5 billion by 2029.
'Profit visibility for Samsung Electronics is improving heading into next year,' said Kim Kyoung-been, an analyst at Samsung Securities. 'The flagship adoption of the Exynos 2600 and the foundry business's turnaround are expected to drive greater earnings momentum in 2026.'
On the latest partnership, experts view the companies' strategic interests as aligned, particularly in light of growing trade pressure from the US.
Apple, which currently produces around 90 percent of its products in China, has faced increasing pressure under the Trump administration's reciprocal tariff policies. In response, the company is expanding domestic production to reduce supply chain risks.
Samsung is also under pressure to expand production in the US to avoid potential tariffs on semiconductors. At a White House event Wednesday, US President Donald Trump announced plans to impose a 100 percent itemized tariff on all chips, while offering exemptions for companies that manufacture in the US or commit to doing so.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Korea Herald
2 days ago
- Korea Herald
MiTAC Computing Partners with Industry Leaders on Open AI Server Solutions at OCP APAC Summit 2025
TAIPEI, Aug. 7, 2025 /PRNewswire/ -- MiTAC Computing Technology Corporation, a leading server platform designer, manufacturer, and a subsidiary of MiTAC Holdings Corporation (TSE:3706), displays its latest AI-optimized compute and GPU servers at the OCP APAC Summit 2025 (booth G04), spearheading the development of efficient and sustainable future data centers. Featured platforms include our liquid-cooled C2820Z5, the cost-efficient C2810Z5, the flexible Capri Series, and the AI-centric G4527G6 – all built for modular, scalable data center deployments in collaboration with AMD, Intel, Micron, Murata, Samsung and Solidigm. Liquid and Air Cooled MiTAC OCP Servers for Every Data Center Need, Paired with Solidigm and Samsung Innovations The MiTAC C2820Z5 server represents a compelling proof of concept for direct liquid-cooled, high-density computing in OCP environments. Ideal for thermally intensive AI workloads, this platform is showcased with Samsung's PM9D3 SSD (MZTL67T6HBLC-00AW7), delivering high-throughput PCIe Gen5 performance, and the Samsung RDIMM DDR5 memory module (M321R8GA0EB2-CCP), optimized for bandwidth-hungry data center applications. Together, they demonstrate a powerful and efficient architecture built for future-forward deployments. Balancing performance and cost-efficiency, the MiTAC C2810Z5 is an air-cooled OCP server built for scalable workloads. It is paired with Solidigm™ D7-PS1010 3.8TB U.2 SSD, designed for consistent QoS and energy efficiency, and the Solidigm™ D7-P5520 7.68TB SSD, which brings high endurance and PCIe Gen4 throughput to the edge of mainstream AI inference and storage-driven compute. This combination offers a practical, deployment-ready solution for operators prioritizing TCO and density. GPU-Powered MiTAC Server Enabling the Enterprise AI Factory The MiTAC G4527G6 is purpose-built for the demands of AI, deep learning, and high-bandwidth computing, and represents yet another successful proof of concept. The G4527G6 serves as a foundational building block in the emerging "Enterprise AI Factory" model, paired with Micron's 9550 NVMe SSD, delivering exceptional PCIe Gen4 performance for data-intensive workloads, and Micron DDR5-6400 DRAM, enabling low-latency AI model training and inference. Production-Ready OCP Servers with Rack-Level Integration for Modern Data Centers: Featuring MiTAC Capri 3 Series and Murata Power Shelves MiTAC Computing's latest production-ready OCP servers, the MiTAC Capri 3 Standard (CP3S11-S) and MiTAC Capri 3 Ultra (CP3S11-U), deliver scalable solutions for a wide range of data center workloads. The Standard model is optimized for general-purpose compute, ideal for virtualized environments and enterprise applications that demand performance without high storage overhead. In contrast, the Capri 3 Ultra supports up to 10 NVMe SSDs, enabling high-density, warm-to-hot storage performance for software-defined storage and data lake deployments. At OCP APAC Summit 2025, MiTAC Computing showcases its rack-level integration capabilities by displaying the CP3S11-U alongside Murata's MWOCES-211-P-D power shelf in a compact mini rack configuration, highlighting a turnkey, modular approach to open infrastructure. By working closely with ecosystem partners across memory, storage, power, and compute, MiTAC Computing showcases the power of collaboration in advancing open, modular infrastructure—enabling next-gen AI and data center scalability. AMD Server Systems: About MiTAC Computing Technology Corporation MiTAC Computing Technology Corp., a subsidiary of MiTAC Holdings, delivers comprehensive, energy-efficient server solutions backed by industry expertise dating back to the 1990s. Specializing in AI, HPC, cloud, and edge computing, MiTAC Computing employs rigorous methodologies to ensure uncompromising quality—across barebones, systems, racks, and cluster levels—achieving performance and integration. This commitment to quality at every level sets MiTAC Computing apart. With a worldwide presence and end-to-end capabilities—from R&D and manufacturing to global support—MiTAC Computing provides agile, customized platforms for hyperscale data centers, HPC, and AI applications, ensuring optimal performance and scalability to meet unique business needs. Leveraging the latest advancements in AI and liquid cooling, and unifying the MiTAC brand with Intel DSG and TYAN server products, MiTAC Computing stands out for its innovative, efficient, and reliable server technology and its hardware and software integrated solutions—empowering businesses to meet future challenges.
Korea Herald
3 days ago
- Korea Herald
Korean chipmakers on edge over Trump tariff plan
Seoul officials quickly reassure that Samsung, SK hynix would avoid 100% tariffs under most-favored nation protection US President Donald Trump said he plans to impose a tariff of about 100 percent on imported semiconductors unless companies manufacture in the US, putting South Korean chipmakers such as Samsung Electronics and SK hynix on edge. 'We'll be putting a tariff of approximately 100 percent on chips and semiconductors,' Trump said at the White House event on Wednesday, where Apple CEO Tim Cook announced the company's additional $100 billion investment in the US. Trump pointed to Apple and said if companies made a commitment to invest and manufacture chips in the US, they would not face the levies. "So, (a) 100 percent tariff on all chips and semiconductors coming into the United States," he said. "But if you've made a commitment to build, or if you're in the process of building, as many are, there is no tariff." However, key details about the tariffs, which could be officially announced next week, remain unclear, particularly regarding the level of domestic manufacturing companies are required to qualify for the exemptions. Semiconductors represented South Korea's second-largest export to the US in 2024, totaling $10.6 billion and comprising 7.5 percent of the country's overall exports to America. While this share is smaller than Korea's exports to China or Hong Kong, industry watchers caution that the potential disruptions to global supply chains could be significant. South Korea's leading memory chip-makers, Samsung Electronics and SK hynix, are said to have engaged in strategic discussions to mitigate risks from any future trade policies. 'We are closely monitoring the situation,' an official at Samsung Electronics said. 'There's a lot of uncertainty around the announcement, as to the timeline and what kind of semiconductor type or product use will be affected,' said a semiconductor industry official in condition of anonymity. 'Trump hasn't named specific categories of chips, like memory or system, and that makes predictions difficult. Depending on how the tariffs are applied, the impact could vary widely.' The concerns come despite cautious optimism that Seoul secured most-favored-nation status through the latest tariff agreement with the US announced last week. However, MFN only guarantees the lowest available tariff rates, not a complete exemption. Following last week's breakthrough tariff deal between the two countries, Deputy Prime Minister and Finance Minister Koo Yun-cheol said Korea would receive treatment no worse than any other country on future tariffs on chips and pharmaceuticals. Observers suggest that Korean companies may face roughly 15 percent tariffs on chips, equivalent to the rate imposed on EU-made chips. Amid growing unease, South Korea's top trade envoy Yeo Han-koo, who led tariff talks with Washington, assured that Samsung and SK hynix will not be subject to 100 percent duties. 'We secured most-favored nation treatment in the latest trade negotiations, especially in areas like semiconductors and bio sectors in the future,' Yeo said in a radio interview with broadcaster SBS on Thursday. 'In other words, we made sure that Korea would not be treated less favorably than other countries. If the US semiconductor tariff rate for MFNs is set at 15 percent, South Korea will also get 15 percent regardless of the rate going up to 100 percent or 200 percent.' Asked whether Samsung and SK hynix will face 100 percent duties, Yeo replied they won't. Samsung has invested in building two new advanced fabrication plants and a research and development facility in Texas, while SK hynix has also revealed plans to establish an advanced chip packaging plant and an R&D facility for AI products in Indiana. These local manufacturing efforts, along with Samsung's recent announcements to expand production of chips in its Texas facility, could suffice for tariff exemptions, observers say. On Thursday, Apple said that Samsung will manufacture the chips for its flagship iPhone at Samsung's plant in Austin, Texas. The announcement follows Samsung's recent $16.5 billion chip supply deal with Tesla.
Korea Herald
3 days ago
- Korea Herald
In rare alliance, Samsung to build iPhone chips at US fab
Back-to-back wins with Apple, Tesla lift prospects for Samsung's struggling chip units Samsung Electronics is set to produce chips for Apple's iPhone at its US fabrication plant, marking a rare partnership between the smartphone archrivals and raising hopes for a rebound in Samsung's loss-making logic chip business. Apple revealed Wednesday that Samsung will manufacture the chips at its plant in Austin, Texas, which will be used to optimize performance for its flagship iPhones. '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,' Apple said in a statement. 'By bringing this technology to the US first, this facility will supply chips that optimize the power and performance of Apple products, including iPhone devices shipped all over the world.' The unexpected collaboration is part of Apple's latest investment under its American Manufacturing Program, bringing its total commitment to $600 billion over the next four years to bolster supply chain resilience and advanced manufacturing in the US. Samsung declined to comment on the partnership, but industry experts expect the company to supply image sensors for future iPhone cameras. Park Yu-ak, an analyst at Kiwoom Securities, wrote in a July report that Samsung's semiconductor division is expected to narrow its operating losses by beginning mass production of image sensors for Apple's iPhone 18 next year and securing new clients such as Tesla. Samsung's System LSI division, which oversees logic chips, produces CMOS image sensors under the ISOCELL brand. The company currently supplies the sensors to its Galaxy smartphones, as well as to China's Xiaomi, Vivo, and Motorola. Apple has so far sourced all image sensors for its iPhones from Japan's Sony. The new partnership with Samsung is seen as an effort to diversify its supply chain. With Apple shipping over 200 million iPhones annually, Samsung is expected to narrow the gap with Sony, the global leader in the image sensor market. Last year, Sony held a 51.6 percent market share — largely due to its supply deal with Apple — while Samsung followed with 15.4 percent and China's OmniVision with 11.9 percent. The deal with Apple, following Samsung's recent $16.5 billion chip supply agreement with US electric vehicle maker Tesla, is also expected to boost prospects for a turnaround in the company's struggling System LSI and foundry divisions. In the second quarter this year, Samsung's logic chip and foundry divisions are estimated to have posted an operating loss in the high 2-trillion-won ($1.4 billion) range. The System LSI unit has struggled with sluggish adoption of its in-house application processor for smartphones, the Exynos, as well as stagnant market share in image sensors. The foundry unit has continued to post losses due to yield issues and order declines. According to market tracker Omdia, the global CMOS image sensor market is projected to grow from $20.8 billion in 2024 to $26.5 billion by 2029. 'Profit visibility for Samsung Electronics is improving heading into next year,' said Kim Kyoung-been, an analyst at Samsung Securities. 'The flagship adoption of the Exynos 2600 and the foundry business's turnaround are expected to drive greater earnings momentum in 2026.' On the latest partnership, experts view the companies' strategic interests as aligned, particularly in light of growing trade pressure from the US. Apple, which currently produces around 90 percent of its products in China, has faced increasing pressure under the Trump administration's reciprocal tariff policies. In response, the company is expanding domestic production to reduce supply chain risks. Samsung is also under pressure to expand production in the US to avoid potential tariffs on semiconductors. At a White House event Wednesday, US President Donald Trump announced plans to impose a 100 percent itemized tariff on all chips, while offering exemptions for companies that manufacture in the US or commit to doing so.
