Next iPhone chip will reportedly be made by Samsung

Samsung will make Apple's next chip, which will likely be called the A9, in its newest factories running on the 14-nanometer manufacturing process, according to a news report in Re/code, which cited anonymous sources familiar with the matter.

Apple designs its mobile chips in-house, but gets them made through contract manufacturers. In the past, Apple has turned to Samsung for most of its iPhone chips, but the most recent A8 chip in the iPhone 6 and iPhone 6 Plus were made by TSMC (Taiwan Semiconductor Manufacturing Co.)

Samsung will be able to supply large volumes of low-power, high-speed chips for the iPhones and iPads. Apple likes using the latest and greatest technologies available, and Samsung's factories would be a more advanced option than the facilities provided by TSMC, which is having trouble transitioning to its 16-nanometer process.

The news could also shut the door on rumors that Apple will turn to Intel to make its mobile chips. Intel also uses the 14-nanometer process to make its chips, but it has a head-start over Samsung in 3D transistor stacking technology, which provides the power-efficiency and speed benefits seen in smartphones and tablets.

Samsung has said it expected to start rolling out 14-nanometer chips in volume by the end of last year. Samsung invested 15.6 trillion Korean won (around $14 billion) more last year in new factories to make chips for mobile devices and industrial equipment. GlobalFoundries could also get involved in manufacturing iPhone chips as it has licensed Samsung's 14-nanometer process technology for implementation in factories.

The competition between Apple and Samsung in the smartphone and tablet markets has been not only intense but also contentious: the companies have sued each other. Apple's iPhone 6 and iPhone 6 Plus have been runaway successes, and Samsung hopes to make magic with the Galaxy S6, which it may reveal at the Mobile World Congress in Barcelona next month.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com