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Samsung Campus

Samsung's semiconductor division has announced preliminary results ahead of its formal Q3 earnings call. 2015 has been a rough twelvemonth for Samsung, overall, but the semiconductor unit's functioning should blunt those losses. Samsung claims to accept earned an operating profit of $vi.3 billion on semiconductor sales in Q3, up substantially from the $3.55 billion operating profit that it posted for the aforementioned quarter in 2014.

The vastly improved results were driven by ii factors: favorable commutation rates and higher overall shipments. Samsung sold roughly 8% more than volume this twelvemonth compared to terminal, and its ASPs may have also improved, buoyed by the launch of the Galaxy Annotation 5 and the Apple iPhone 6s and 6s Plus. It shares the latter hardware with TSMC; Apple opted to dual-source its product terminal year afterward years of relying on a single vendor (normally Samsung) for its chip launches.

Some analysts have warned that the majority of this spring was driven by relatively pedestrian causes — namely, shifting foreign exchange rates. Even so, we expect to run into Samsung finish 2015 on a high note. Qualcomm is preparing to launch its Snapdragon 820, a 14nm fleck built on Samsung's semiconductor technology, and its share of the iPhone six concern should stand it in expert stead for the rest of the year.

SamsungFab

Samsung'due south Austin foundry

Every bit we previously forecast, this reward is coming at the expense of TSMC, which has already stated it expects much more modest Q3 2015 results. Back in July, the visitor stated that it expected acquirement to grow past no more than 2.2% for Q3, upward to $vi.75 billion. Like Samsung, TSMC should see a heave in the end of the year, thanks to Christmas sales and a fresh crop of Android smartphones. It'south not clear which manufacturers are going to adopt TSMC's 16nm FF+ node as compared to Samsung's already-shipping 14nm hardware, but 2016 should give the Taiwanese foundry fresh ammunition with which to compete. Both firms have already announced that they intend to enter risk product on 10nm by the end of 2016, though that ways something different in foundry land and so information technology does when Intel or AMD say it. Fifty-fifty if both companies see their goal of Q4 2016 for early 10nm ramps, we don't expect to run across shipping 10nm solutions until the back half of 2017 at the very earliest.

Meanwhile, Samsung is still struggling to turn its phone business effectually. The company has lost significant low-end marketplace share in recent years, cheers to competition from companies Xiaomi and Huawei. Strong profits from the semiconductor partitioning and overall technical leadership tin can definitely assistance, just the Galaxy S6 / S6 Plus simply wasn't the winning solution that the company hoped it would be. Now that Apple competes directly with Samsung in the large-screen device space, Samsung may desire to revisit some of the features that made its devices preferred options — similar, say, microSD cards and replaceable batteries.