Report: Apple Hopes to Drop Samsung, Tests TMSC Chips

From DailyTech: As predicted, Apple, Inc. is looking to distance itself from one of its top suppliers -- Samsung Electronics Comp., Ltd.

Samsung is one of three top Android smartphone makers. Getting outsold two-to-one by Android, Apple has sued all three of the top Android smartphone makers including Samsung. Apple claims that Samsung and other Android makers both ripped off its technology and its patented thin-black rectangular design. Samsung responded with countersuits.

The growing legal war has created a bitter divide between the firms and put Samsung's status as one of Apple's top chips suppliers in jeopardy. Apple is the largest single buyer of Samsung liquid crystal displays. It also relies on Samsung for DRAM chips (iPad) and CPUs (iPad/iPhone).

According to a Reuters report, the Taiwan Semiconductor Manufacturing Company (TPE:2330) has begun trial production of the A5 CPU found in the iPad 2, in a move that clearly signals Apple's desire to drop Samsung.

However, according to the report, Apple may find doing so difficult. Samsung helped design the A5, reportedly, and holds key patents on some of its technology. Also, TMSC may have difficulty replicating the design without defects. Lastly, despite the companies' awkward relationship, Samsung is actually trying to convince Apple to keep it as a supplier.

Fubon Securities analyst William Wang is quoted as saying, "Apple is trying to diversify its orders but it will still maintain some kind of relationship with Samsung. I think TSMC will get the new chip orders, the issue however is allocation. Apple won't give the whole 100 percent to TSMC. Maybe it'll allocate only 20-30 percent."

View: Article @ Source Site