Apple to dump Samsung for TSMC in A6 chip production snub?

Jun 27, 2011
5

Apple and Samsung's ongoing legal rumpus could see the Korean company lose the manufacturing contract for the next-gen Apple A6 processor, with Taiwan Semiconductor Manufacturing Company (TSMC) the likely benefactor of the supply chain shakeup. According to both a Taipei Merill Lynch analyst and an Ars Technica source, Apple and TSMC are currently in talks with the entire A6 production deal on the table.

Although rumors of Apple negotiating with TSMC are not new, until now it had been assumed that the company would be joining Samsung as a supplier, rather than replacing them altogether. That would certainly have fit in with Apple's ramping up of production supplies as it increased its sales ambitions; some analysts have suggested that the company will launch not just one but two fifth-gen iPhones later this year.

Instead, however, it looks like Apple is attempting sever ties with Samsung and reduce its reliance on the company. It was revealed recently that Apple is Samsung's second-largest component buyer - the first being Sony - with the Cupertino company's business being worth $5.7bn in sales each year. A considerable chunk of that is in semiconductors, though Samsung also supplies NAND flash memory and other parts.

As the legal tussle gets more serious, however, and Samsung's share of the smartphone market grows, Apple is apparently hoping to pull the plug - at least in part - of some of its rivals income. Samsung currently produces both the Apple A4 and the dual-core A5 as found in the iPad 2.

[via This is my next]


Must Read Bits & Bytes