Apple pens deal with Taiwan Semiconductor Manufacturing after delays

Jun 29, 2013
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Apple pens deal with Taiwan Semiconductor Manufacturing after delays

We reported on April 11 following a tip that Apple was distancing its hardware relationship with competitor Samsung via a deal with Taiwan Semiconductor Manufacturing Co. While the rumor proved to be true, that deal was delayed due to "glitches" and other problems on TSMC's part, with the manufacturer having issues meeting Apple's quality standards. These issues have now been ironed out, according to a statement from the company, and the deal has been made.

Apple has been working towards distancing itself from Samsung for many months now that the Korean company continues to grow and develop a host of new smartphones. The two companies became embroiled in numerous - and quite extensive - legal battles, adding fuel to the growing fire between them. It was late last year when we began hearing about "risk diversification" and other moves by Apple to distance itself from the business relationship.

Such was the source of a report back in October 2012 that detailed Apple's attempt to divert chip production from Samsung, something that was said to be a business decision as Apple's interest was focused on TSMC's 20 nanometer hardware versus Samsung's 32 nanometer. Another source at the time, however, said that the bad blood was, indeed, the leading reason for the change, and that Apple was merely following through with contracts with Samsung before moving elsewhere.

Since then, other reasons have been tossed around, such as Apple shifting to other companies as a way to diversify its risk. All of this aside, the reality is that despite the new deal with TSMC, Samsung will remain Apple's primary supplier throughout 2014. The information comes from The Wall Street Journal, which spoke to several sources, including current and former Apple executives.

One former executive was quoted as saying that shifting away from Samsung - with whom Apple has relied on heavily and done business for years - would be a "daunting" task, forcing it to start over with a new manufacturer. Another executive said, however, that Apple believes continuing to work with Samsung cripples its negotiation powers and has reduced "ability to control its destiny," both in terms of the aforementioned negotiation limitations and in the freedom to branch out to other technologies.

SOURCE: Android Community


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