Samsung Electronics to produce Apple's next-generation chip at Texas foundry

SEOUL, Aug. 7 (Yonhap) -- Samsung Electronics Co. will produce Apple Inc.'s next-generation chip at its chip foundry plant in Texas, the U.S. tech giant said Thursday, in another major deal for the South Korean tech giant following its recent agreement with Tesla.

In a press release, Apple said it is working with Samsung at the latter's semiconductor plant in Austin to develop an innovative new chip manufacturing technology that is being used for the first time in the world.

"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 its release.

"By bringing this technology to the U.S. first, this facility will supply chips that optimize power and performance of Apple products, including iPhone devices shipped all over the world," the iPhone producer added.

Industry watchers believe the chip will likely be a CMOS image sensor (CIS) to be used in the next-generation iPhone.

Apple has been securing all of its image sensors from Japan's Sony Group Corp., which accounted for more than half of the market as of last year, according to market data. Samsung Electronics was the second-largest player with a 15.4 percent global market share.

Samsung declined to confirm details.

The announcement came about a week after Samsung secured a US$16.5 billion deal to supply artificial intelligence (AI) semiconductors to Tesla.

In a report released last month, South Korea's Kiwoom Securities Co. had suggested Samsung's semiconductor business could improve its profitability next year by producing image sensors for the next-generation iPhone.

In July, Samsung Electronics said its net income plunged nearly 50 percent in the second quarter, as its semiconductor division logged its lowest earnings in over a year due to sluggish demand for high bandwidth memory.

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