Apple says Samsung will manufacture its iPhone chips in its Texas plant

Tech giant Apple confirms it will source chips for its iPhones from Samsung Electronics’ production plant in Austin, Texas. The Cupertino company announced, “This facility will supply chips that optimize the power and performance of Apple products, including iPhones,” referring to Samsung’s Texas manufacturing hub.

The move is part of Apple’s broader American Manufacturing Program (AMP), through which the company is teaming up with the South Korean memory chip giant and other key suppliers to strengthen its local supply chain and boost domestic production.

Analysts expect Samsung to supply Apple with image sensors

Earlier, Trump had warned Apple it could face a 25% tariff on products developed abroad, possibly reversing earlier policies that shielded iPhones and other electronics from China-related import taxes. 

After which, the tech giant pledged another $100 billion in US investments to increase local production—bringing its total planned investment to $600 billion over the next four years. The company has even partnered with major chip suppliers like Samsung, TSMC, Broadcom, GlobalFoundries, and Applied Materials.

Daniel Ives, an analyst with Wedbush Securities, has commended the iPhone maker’s decision, saying it helps it remain in Trump’s good graces. However, other analysts pointed out that the investment numbers are not that different from the firm’s routine capital outlays and repeat pledges made during both the Biden years and Trump’s previous term. Nonetheless, Apple says it will kick off U.S. production of next-gen chips used in Apple products, including iPhones distributed globally.

On Wednesday, Apple also revealed that its new supplier, Samsung, will manufacture chips at its Texas facility. The deal could further bolster Samsung’s semiconductor operations, just weeks after landing a $16.5 billion contract with Tesla. Still, Apple hasn’t disclosed which specific chips Samsung will be supplying. Though analysts believe the South Korean chip maker could provide image sensors, like the ISOCELL,  for Apple.

Samsung’s foundry arm still supplies chips for its Galaxy devices. It produces ISOCELL chips for its Galaxy smartphone series,  Xiaomi, Vivo, and Motorola Mobility.

Analyst Park Yu-ak of Kiwoom Securities even noted that new chipmaking contracts, such as those for the Galaxy Z Flip7’s Exynos 2500, CIP chips for the iPhone 18, and Tesla’s silicon, could help the company narrow its losses.

Apple has traditionally relied entirely on Sony Corp. for image sensors in its iPhone models and camera features. In 2024, Sony held more than 50% of the global image sensor market, with Samsung trailing at 15.4%. Though Ryu Young-ho, a senior analyst at NH Investment & Securities, notes that Samsung will be handling a portion of the image sensor supply that Apple once sourced exclusively from Sony.

He noted that the move would lessen Apple’s dependence on a single supplier and align with its broader strategy to increase U.S.-based sourcing.

Trump proposed a 100% tariff on semiconductors, which could hurt South Korean chip companies

On Wednesday, US President Donald Trump announced a 100% tariff would be applied to all imported chips, though companies with U.S.-based manufacturing could be spared.

The suggested tariff has raised uncertainty over the potential impact on South Korean chipmakers, especially Samsung and SK Hynix Inc., the latter being the world’s leading producer of high-bandwidth memory (HBM) chips. Although the U.S. is South Korea’s fifth-largest destination for semiconductor exports, semiconductors are the second-most valuable Korean export to the U.S., following automobiles. In 2024, semiconductor exports from Korea to the U.S. totaled $10.6 billion.

However, Commerce Secretary Howard Lutnick has clarified that South Korea would be treated no differently than other nations regarding semiconductors and pharmaceuticals. Though the U.S. has already promised zero tariffs on EU chips and minimal rates on Japanese semiconductors. 

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