The processor race between Microsoft and Apple that's now reportedly heating up is like an early Christmas gift for Samsung's chipmaking business. Because no matter who comes out on top, assuming we even get a clear-cut winner, their reward will come in the form of priority access to the Samsung Foundry production lines.
As if Samsung didn't already have enough reasons to be rooting on the sidelines of this emerging race, Microsoft's rising ambitions in the segment are said to revolve around Arm-based chip designs. This should allow the South Korean tech giant to address Redmond's costly repurposing of its manufacturing operations. Apple, for its part, is already all-in on Arm's silicon architecture in the long term.
Is there anything but explosive growth ahead for Samsung's foundry business?
Even before the first reports have alleged that Microsoft started dabbling in custom chips, Samsung was expected to make a killing from Apple's M1 chipsets. That's after missing out on the last half a decade's worth of custom silicon orders from Apple. As the entirety of that business went to TSMC over the stated period. But with Apple now starting to ditch Intel chips, Cupertino is keen on diversifying as soon as possible. Doing so is simply common business sense, as it leaves Apple with more leverage in negotiations with suppliers.
And new negotiations are definitely on the horizon after the first generation of M1-powered MacBooks launched to nothing short of stellar reviews. By most accounts, consumer demand for these seminal notebooks will remain strong for the foreseeable future. It will hence be up to Samsung to capture as many of their M1 orders as possible. Of course, seeing how it missed out on manufacturing Apple's custom silicon over the last five years, even a minor success in this segment would have a substantial effect on its bottom line.
TSMC has certainly been giving Samsung a run for its money lately, but not without a response. Samsung has most recently snatched the entirety of NVIDIA's GeForce RTX 30 Series order right under from its fiercest chipmaking rival.
Meanwhile, Microsoft's own R&D is reportedly geared toward cloud-based applications more so than consumer electronics. This isn't to say the company has no desire to deliver a direct M1 rival in the next several years. It's just that doing so isn't its topmost priority for the time being. Especially since it already managed to kickstart its own shift away from Intel in collaboration with Qualcomm. Since last year, this partnership yielded two unique chipsets manufactured on TSMC's 7nm (TSMC N7) process node – the SQ1 and SQ2 powering the first two generations of the Surface Pro X 2-in-1.
Microsoft's motivation for diversifying the manufacture of its own chip designs is pretty much identical to Apple's incentive. And guess who's already expected to handle the majority – if not the entirety – of Qualcomm's next flagship SoC production? Not to mention that Amazon is also said to be pursuing custom server silicon based on Arm's designs and will be in the market for a foundry to contract in the very near future.
All things considered, the Samsung Foundry has a pretty monumental year ahead of it. And with a bit of luck, even Samsung SLI will finally give it something nice and Exynos-branded to work with, thus redeeming the utter mediocrity that the Exynos 990 turned out to be.
