updated 09:35 am EDT, Mon October 17, 2011
Business, legal issues being kept separate
Samsung is still the main producer for Apple's next-generation mobile processor, the A6, claims an anonymous executive with a South Korea-based Apple supplier. "Apple has been in talks with Samsung over shipment of its A6 quad-core mobile processor (AP) chips to be used in the next iPhone. It appears that Apple clearly has concluded that Samsung remains a critical business partner," the person tells the Korea Times. Samsung is in fact said to be boosting output of A6 chips at a manufacturing plant in Austin, Texas.
Apple has previously been rumored as wanting to shift chip production over to TSMC -- possibly to reduce dependence on a company it is still involved in intense legal battles with -- but the supplier executive counters this view. "Samsung Electronics will apply its advanced 28-nanometer processing technology to produce qualified A6 mobile APs. TSMC will provide customized chips with designs from Apple, however, the volume will be very small," he remarks.
Samsung Electronics' CEO, Choi Gee-sung, recently stated that Samsung is handling legal problems separate from business relationships. He also mentioned that COO Lee Jae-yong -- son of chairman Lee Kun-hee -- flew to the US to attend a private memorial service for Steve Jobs on Sunday. Lee was invited by Apple CEO Tim Cook; the two are also expected to have a meeting covering several unspecified topics.
One advantage Samsung claims to have over companies like TSMC is the capacity to make custom chips on a foundry or contract basis. "The manufacturing process at TSMC hasn't been stabilized," adds an official with another Apple supplier. "Considering Apple's previous patterns of adopting qualified technologies, Apple isn't taking risks. Samsung offers better pricing and capacity commitment for the A6 mobile APs."
While the report discusses the A6 in the context of the iPhone, Apple is typically expected to use it first in the iPad 3, which should ship early next year, probably in March or April. One source for the Times in fact claims that both the iPhone 5 and iPad 3 launch will "within the first quarter of next year," but this is extremely unlikely. Apple has always preferred a summer launch for new iPhones, this year being the first exception, when a refresh happened on October 14th.