Over the past few years, Apple has tried to distance itself from using Samsung as a supplier, which makes sense considering that Samsung was also Apple's main competitor in the mobile market. Apple didn't want Samsung to gain any advantages it might not get otherwise if the company wasn't its supplier.
Apple managed to manufacture 100 percent of its chips on TSMC's processes as recently as last year. However, earlier this year, there were some rumors that Apple may go back to Samsung and its 14nm FinFET process, which is ahead of TSMC's 16nm FinFET process both in terms of performance and time to market speed.
The Exynos 7420 chip inside the Galaxy S6 is already built on Samsung's 14nm process, while no TSMC 16nm chip is expected to come out until Q4 this year. That wouldn't be a major issue for Apple, though, as that's when the company plans to release its new iPhones and iPads anyway.
New reports say that Apple will continue to manufacture the bulk of its A9 and A9X chips at TSMC's foundries. As many as 70 percent of the chips are expected to be built on TSMC's 16nm process, with the A9X (the iPad chip) to be built exclusively on TSMC's process.
"We believe TSMC will earn most of the A9 orders thanks to its superior yield ramp and manufacturing excellence in mass-production. We expect TSMC to earn all of Apple's A9X orders (for the next generation iPad) and most of the A9 (for the next generation of iPhone), aggregating to an allocation of over 70%," said analysts from Daiwa Securities.
Even if TSMC's process has slightly lower performance than Samsung's 14nm process, that shouldn't be much of an issue inside the much larger iPads, compared to the smaller space inside the iPhones. However, considering the new report said that up to 70 percent of the chips will be built on 16nm, it's possible that Apple may build the A9 chip that goes inside the iPhone 6S Plus, as well. The iPad market is shrinking, and it was never that large compared to the iPhone market, so at least some of the iPhone chips will have to be built on 16nm in order to reach that high percentage.
Apple doesn't like to rely much on Samsung as a supplier anymore, which is probably why the company intends to use TSMC whenever possible, but this time there may have been a yield issue as well. This was the first time Samsung opted to use Exynos chips exclusively in its high-end flagship and its most popular device, which is already seeing great demand, so there may not have been too much room left on its foundries for Apple's chips.
Apple is also expected to sell many new next-generation iPhones this fall, and it's possible Samsung couldn't cover the manufacturing for both flagship devices in such a short period of time.