Apple Inc. (AAPL) Switching from Samsung to TSMC for A5 SoC Manufacture?

 In iPhone

Samsung and Apple have been pretty tight for the last few years. And Apple are as of today still Samsung’s largest customer for manufacturing of a number of components for their iOS devices. Samsung are even rumoured to be building extra chip fabrication plants specifically for Apple’s growing volume requirements for mobile silicon. In the past Samsung and Apple even collaborated on some of the design aspects of the Apple A4 generation of SoCs.

Today however, some news that is perhaps a little worrying for Samsung has come to light. EETimes are reporting that Apple are switching their production of the Apple A5 SoC, for the iPad 2, to Taiwanese manufacturer Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).

According to the accounts leaking out it is for a number of reasons. Apple now views Samsung as a competitor in both the tablet and smart-phone market. TMC have a higher yield 40nm process for producing chips. And their higher yield foundry also has a higher overall production capacity to boot.

All those reasons may well be true. But if you remember, Apple has also had supply chain issues with both the iPad and iPhone in the past 18 months. Part of those problems were because Apple was relying on one manufacturer for key components, while others were yet to come online.

With Apple’s expected increase in iPad and iPhone sales this year, it seems likely that Apple may well be looking to ensure it has options and room for expansion.

Time will tell.

Does Apple see Samsung as competition and want to stop throwing money and opportunity their way? Or are Apple simply being pragmatic as they grow their manufacture bees to match their retail success? Let us know your thoughts in the comments…


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