Apple’s current line of A-series chips (A5, A5X, A6, A6X) are made by its arch rival in the industry, Samsung. Obviously, the company has been contemplating a switch in manufacturers for quite some time now. We previously reported that Apple had planned to seek TSMC’s (Taiwan Semiconductor Manufacturing Co) services to fulfill its requirements for the A-Series chips used in iOS devices. And now it seems like the speculations were indeed true as a report coming from Taiwanese daily Commercial Times states that Apple has struck a deal with TSMC to produce A6X chips which is used in the fourth gen Apple iPad. As of now, we’re only hearing reports of TSMC preparing A6X chips and there’s no info on whether the Taiwanese manufacturer will manufacture other Apple chips too. The said chip will go into trial production beginning from the first quarter of this year, so it could take a few more months for the companies to formally sign a pact.
This is a setback for Samsung as Apple is their top client accounting to millions of their revenue. The two companies have been fighting patent trials in courtrooms with one verdict ruling Samsung to pay in excess of $1 billion to Apple as a fine. So it was almost obvious that Apple was looking to move away from Samsung and look towards alternatives. The aforementioned trial production of the A6X chip by TSMC could break down if the company isn’t able to produce the required amount of chips in time, so all is not final yet. On the flipside, if TSMC is able to succeed in meeting Apple’s demands, we could see them making all future A-Series chips for iOS devices.
The main purpose behind switching to TSMC, other than getting out of Samsung’s partnership is that TSMC makes its chips using the 20nm technology. The Samsung made A6X chip is made using the 32nm process, so there will be substantial increase in performance. Whether TSMC will be able to manufacture the chips for a lesser amount is still not known. The Korean’s would lose a large chunk of their income with this deal falling off, but they should make up for that with increased sales of the next Galaxy flagship. Samsung plans on selling 510 million handsets in 2013. So if that estimate is anything to go by, we shouldn’t see Samsung having any problems with the proposed Apple-TSMC deal.