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WSJ: Taiwan Semiconductor confirmed to become 2014 chip supplier

updated 10:00 pm EDT, Fri June 28, 2013

Will take over as main supplier from Samsung with 20nm A-series chips

The Wall Street Journal says it has confirmed with an executive for the company that Taiwan Semiconductor Manufacturing Company (TSMC) will become the lead supplier of Apple's in-house-designed A-series processors in a ramp-up beginning in 2014 with 20nm system-on-chip (SoC) processors, confirming Electronista's report from DigiTimes that appeared earlier this week. The company, which has been an Apple supplier for years, is said to have recently overcome some technical obstacles to increase its output to the speed, power and quality standards required by the iPhone maker.

According to the article, the two companies have been trying to reach an agreement since 2010. Currently, Samsung is the exclusive supplier of Apple's A-series processors, and the change will be seen as part of a deliberate strategy by Apple to distance itself from its now-main competitor. While Apple will likely continue to get some parts from Samsung for the foreseeable future, the volume and reliance on the company has dwindled over the past few years -- as the two competitors trade legal charges and dominate the smartphone industry.

Apple has also diversified other parts sources away from Samsung, including iOS device displays and some NAND flash memory, though Samsung continues to supply the latter for some of Apple's iPhone and iPad models. While CEO Tim Cook has expressed confidence in the past that Samsung would not and has not taken advantage of its knowledge of Apple processors to copy their technology, the Korean company has been convicted multiple times of flagrantly infringing on Apple's technical and design patents in creating its own products.

Currently, the company is using Samsung chips made with a 32nm process for its mobile devices, but the move to TSMC's 20nm process will likely bring further savings in battery life and processor efficiency when the chips are used in future products. Rumor has the next iPhone and iPad models using an as-yet-unseen "A7" chip, however as the new models are expected in the fall, there is little chance of them using the future 20nm chips. Those are likely for future versions of Apple's mobile processor, and may be unseen until the late-2014 versions of the products, or in other devices like the Apple TV.

The move away from Samsung may hurt the Korean company more than it thinks: in becoming a technological powerhouse with its own Android-driven devices, Samsung has and is continuing to hasten the demise of most other Android makers, none of whom are making any money in the smartphone or tablet market. Faced with an unsustainable rivalry, many current players such as LG, HTC, Asus and others may be forced to get out of the smartphone business entirely, leaving fewer alternative buyers for Samsung's technology.



By Electronista Staff
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