Samsung Electronics will reportedly manufacture chipsets to be used in Apple's next iPhone iteration.
Apple A9 chips will be manufactured at Samsung's Giheung plant in South Korea, according to sources with knowledge about the matter reports Bloomberg. Additional orders will go to Samsung's partner Globalfoundries, said sources who wish to remain unidentified as the contract is yet to be discussed publicly.
Last year Samsung lost the contract order to make iPhone and iPad chips to the Taiwan Semiconductor Manufacturing Company (TSMC). Apple chose TSMC to make A8 mobile application processor for iPhone 6 and iPhone 6 Plus.
This agreement was a result of the bitter relationship between Apple and Samsung over the legal disputes earlier in 2011. Samsung filed a lawsuit against Apple claiming patent infringement, which occurred just a week after Apple filed a complaint in the US federal court alleging Samsung to have copied its products.
"If the Globalfoundries quickly adopts Samsung's most advanced technology and increases yield, it could also win orders from Qualcomm," said Song Myung Sup, analyst at HI Investment & Securities Co, in Seoul, while pointing additional business order for Samsung.
He further added supplying chips for iPhone and its own Galaxy S6 series will help Samsung turn its semiconductor business from a KRW1tr ($914m) loss last year to KRW1tr gain.
Both chip manufacturers Samsung and TSMC have boosted capital expenditures in more than $300bn semiconductor industry in a bid to gain business from Apple and Qualcomm.