During the Apple (AAPL) product introduction last Tuesday, Tim cook mentioned that the heart of the new iPhone 5S was the A7 chip, which contained a billion transistors. The size of the chip grew from 96 sq. mm for the A6 to 102 sq. mm for the A7.
Experts at Chipworks who claim to be familiar with the Apple "A" chip part numbering system suggest that the early peeks at the A7 chip indicate that it was made at a foundry other than Samsung (OTC:SSNLF).
Also, Samsung introduced its new Octa chip on September 10, apparently to steal some thunder from Apple's A7 chip announcement. Is that a smart thing to do if you are the foundry for the A7?
It appears that to get 1 billion transistors on a 102 sq. mm chip would require something much better than the 28nm processes available at either TSMC (TSM) or Samsung. Some are speculating that the A7 is being built by TSMC on a 20 nm planar process. That would be all well and fine except that TSMC claims that its 20nm process will not be ready for volume production until early 2014.
What do we know about relative chip size from 32nm to 22nm processes?
A Sandy Bridge EP-4 is made on a 32nm process and had 1.27 billion transistors with a chip size of 294 sq. mm, so a 1 billion transistor logic chip on 32nm should be around 232sq. mm. Even giving a 25% improvement for a 32 to 28nm transition, the chip size should be about 174 sq. mm.
The Ivy Bridge HE-4 is made on the Intel (INTC) 22nm Trigate process and has 1.4 billion transistors with a chip size of 160 sq. mm, so a billion transistor logic chip on 22nm should be around 114 sq. mm. "Hand packing" the A7 design might give another 10% size improvement, which would make the A7 chip almost exactly 102 sq. mm. on the Intel 22 nm process.
I will leave it for you to come to your own conclusions, but if there is another semiconductor manufacturer that is capable of the A7 volume at anything close to 22nm, Intel and I are in deep yogurt.
The Intel Jan 2014 30 call options are about a nickel.