The symbiotic business relationship between Samsung and Apple is now coming to an end. Per AFP report, Apple has contracted Taiwan Semiconductor Manufacturing Co to start manufacturing the A6X chip (currently powers iPad 4 tablet) with trial production set for the first quarter of this year. The trial will presumptively be in-place to check if TSMC can keep with Apple’s high demand. It’s unclear exactly when TSMC-produced chips could begin appearing in Apple’s iOS devices. The report was, however, originally sourced from Taiwan’s Commercial Times.
Switching its chip manufacturing completely from Samsung to TSMC is expected to be a complex transition that could take Apple as long as 18 months to complete. At present, the A5X processor manufacturing from Samsung has only been reduced and not stopped completely.
Amid ongoing patent lawsuits, Apple has been working hard to secure supplies from other manufacturers to reduce its reliance on Samsung. The Korean company racks up a huge revenue stream from Apple and terminating the contract with Apple would consequently inflict a sizeable multi-million dollar dent in the company’s revenue and could inflict a serious blow on Apple’s supply chain.
Many analysts believe that the reason for ending contract could be due to low margins. However, many believe the reason could be the result of courtroom dispute with Apple. Recently a jury awarded Apple $1.05 billion USD in damages in a patent infringement dispute against Samsung for illegally copying iPhone and iPad features for its flagship Galaxy S smartphones. The South Korean company has since appealed the U.S. ruling.
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