Monday, October 15, 2012

Apple Inc. (NASDAQ:AAPL) to move away from Samsung chips Amid Court Battles

Apple Inc.(NASDAQ:AAPL) and Samsung are bitter rivals in the marketplace where both are vying for dominance in the fast-growing smartphone segment.

On the other side they are both partners too as Samsung produces the chips that power Apple's iPhones and iPads.

However recent court battles in various countries, where both companies are trying to get the sales of the other banned, have become so acrimonious that Apple has decided to reduce its dependency on Samsung for chip and has reportedly turned to Taiwan Semiconductor Manufacturing Company.

The story was first reported by CENS, which said that TSMC would be the sole supplier of 20 (nanometer) nm process for Apple's quad-core processors for the next one to two years.

One of the reason ascribed to Apple moving away from Samsung to TSMC is that the latter is much cheaper compared to the Korean company, which has a higher cost of production.

CNET followed up the story and quoted a source as saying, "The Apple-Samsung relationship has deteriorated to such a poor point that they're just looking to fill contractual obligations, then make a change."

Since Apple is a huge consumer of chips, it means that TSMC would have to allocate a lot of its resources to the company and this could have an impact on its other clients.

Faster and more powerful chips can have a significant impact on the performance of a device and can also preserve battery life.

However makers of mobile devices very rarely talk about the chips they are using unless there is a very radical change happening.

Analysts said that the shift from Samsung to TSMC would happen gradually with supplies from Samsung being ramped down while that from TSMC is ramped up.

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