Apple Supposedly Breaks Ties With Samsung for A-Series Chip Making

tsmc

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.

email

About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik

  • orthorim

    Obviously Apple has been trying to do just that for years – for both processors and LCD panels. So far it hasn’t exactly worked out. I’m not sure why but Samsung manufacturing seems to have a leg up on the competition….

    • http://www.sacramaniacs.com/ Lory Gil

      My guess is that it has something to do with money. Samsung already has the infrastructure in place to make the parts that Apple wants. Other manufacturers have to retrofit their factories to meet Apple’s needs, making it harder to compete with Samsung’s prices.