More than a year ago, rumors began to swirl that Apple was setting up a strategy that would eventually end a tumultuous relationship with Samsung whom, at the time, was battling the company around the world for patent infringement lawsuits. A few months ago, India Times reported that Taiwan Semiconductor Manufacturing Company (TSMC) was already working on Apple’s new A8 chip, which would be used in this fall’s iOS lineup.
Today, the Wall Street Journal claims that TSMC has begun shipping its first batch of microprocessors to Apple, unseating Samsung as the major supplier for chip sets.
According to the Wall Street Journal, Apple and TSMC have agreed on a long-term contract that will result in a more advanced chip set next year. Thanks to the deal, TSMC can use its high-profile customer as leverage to support expensive research investments. At the same time, Apple gains the advantage of negotiating a lower price with chip suppliers now that it has additional help.
This move adversely affects Samsung as the company was the exclusive supplier for microprocessors for iPhone and iPad devices. Apple used to rely on Samsung for a variety of parts including screens, memory chips, and microprocessors. Since the two began their worldwide patent battle, Apple has found other suppliers to help with manufacturing, including SK Hynix, Toshiba, and more.
Unnamed sources that spoke with the Wall Street Journal say Apple will continue to use Samsung for some of its microprocessor needs, but the former will likely increase its orders from TSMC because the Taiwan based company does not compete directly with Apple in the consumer electronics market.