Apple shifting some microprocessor production to TSMC

Apple’s been dependent on Samsung as a supplier of some of its most sophisticated components, like microprocessors, for years. But a change may be in the air: we hear that Taiwan Semiconductor Manufacturing Co. or TSMC has begun shipping its first batch of microprocessors to Apple. What’s more, Apple and TSMC have already agreed to work on “more advanced chips next year”. Read on to learn more!

TSMC Taiwan Semiconductor Manufacturing Co. logo

A key development

Make no mistake, this is quite a significant development. Samsung has been Apple’s only supplier of microprocessors, dating all the way back to the 2007 launch of the iPhone – and this marks the first time that any other company is shipping Apple microprocessors. It’s not for lack of searching, of course; Apple’s been trying to reduce its reliance on Samsung over the past few years, but it’s found more than once that few other companies can match Samsung’s skill at churning out high-quality components to scale.

As a result, TSMC stands to see a big boost to its bottom line; analysts reckon that this new deal inked with Apple represents no less than 10% of TSMC’s revenues.

Sayonara, Samsung?

This news comes of course against the backdrop of a shift in the Apple-Samsung relationship. While Apple has continued to be one of Samsung’s best customers over the years, the two have also become tough competitors, as Samsung has successfully managed to develop smartphone and tablet lines of its own. Apple has hauled Samsung to court more than once over supposed patent infringements; although it may have won most of those battles, Apple has been forced to continue to rely on Samsung to provide microprocessors for its popular devices.

Additionally, of course, although it does continue to be the world’s top Android manufacturer, things aren’t all rosy for Samsung at present. It’s blamed increasing competition from Chinese manufacturers for its below-par profits (just a few days ago, we heard that profits for the last quarter could be as much as 25% below those in the same quarter last year). And what with Google’s upcoming Android One initiative – which will result in cheap Android phones becoming even more competent and Google-compliant – and Apple’s upcoming big-screen iPhones, the pressure on Samsung will only increase.

Will this deal with TSMC be the beginning of the end for this longtime business relationship? And will Samsung be able to do anything to counter these developments? We’ll just have to wait and see.

source [ Wall Street Journal]

via [ BGR]

Technorati Tags: , , , , ,

Leave a Reply