Apple Will Dump Samsung -- Again

There's no love lost between Apple (Nasdaq: AAPL  ) and Samsung these days. The two international tech stars used to be partners, tighter than David Hasselhoff's leather pants. But now that they're the two largest purveyors of smartphones on a global level -- head-to-head competitors of the highest order -- the cozy relationship is falling apart.

Rumor has it that Apple is getting ready to punt Sammy as manufacturer of Apple's home-designed mobile processors. Citigroup Global Markets, which is Citi's international research division, believes that Taiwan Semiconductor Manufacturing (NYSE: TSM  ) will start shouldering that workload over the next couple of years.

In particular, Citi sees TSMC handling quad-core processors on an advanced manufacturing platform. These chips would be suitable for future iPads, the long-rumored iTV, and maybe even some MacBooks. iPhones and iPods would still run on less advanced technologies with lower power consumption, and Samsung might still get to manufacture some or all of those. Maybe.

These quad-core chips may have been in the works since Apple acquired Intrincity back in 2010. That firm has a track record of working on multi-core processors in the ARM Holdings (Nasdaq: ARMH  ) family. Add in the fact that TSMC makes advanced ARM-based chips on behalf of QUALCOMM (Nasdaq: QCOM  ) and NVIDIA (Nasdaq: NVDA  ) , and the puzzle pieces fall into place.

Yes, this is just an educated analyst guess at this point, but I'd be surprised if it didn't happen.

Apple has about a billion reasons to give Samsung the cold shoulder nowadays, and TSMC is a world-leading provider of chip-building services. So maybe this new partnership takes a year to really heat up, but there's almost certainly some fresh Cupertino business coming TSMC's way.

Whoever Apple chooses to make its component parts will benefit immediately, because Apple's orders tend to be huge. By picking up a copy of our premium research report on Apple, you'll learn everything you need to know about Apple's record-breaking iPhone 5 launch, and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' bio and holdings, or follow him on Twitter and Google+. The Motley Fool owns shares of Qualcomm and Apple. Motley Fool newsletter services have recommended buying shares of Apple and NVIDIA, as well as creating a bull call spread position in Apple and writing puts on NVIDIA. We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletters free for 30 days. The Motley Fool has a strict disclosure policy.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 14, 2012, at 8:47 PM, JaanS wrote:

    Anders

    Good informative article. YOu might find mine on the culture wars interesting:

    http://beta.fool.com/jaans/2012/10/13/understanding-apple-no...

  • Report this Comment On October 14, 2012, at 11:11 PM, 2DayTripper wrote:

    Anders Bylund's wrote an article that I found interesting, but felt like an itchy case of gossip. I won't mind hearing a future "I told you so..", but for now, someone is going to be repeating this article as fact and also for now, it's just not so.

  • Report this Comment On October 15, 2012, at 7:46 AM, buckyfinkelstien wrote:

    TSMC is not a good option for Apple as a foundry partner, TSMC is already having problems meeting demand for Apple's other pieces of silicon. And they are behind the curve relative to Intel in process technology.

    A much more realistic rumour would be that Apple will do a foundry deal with Intel. Intel's core competency going into the future is process and capacity, they are far behind the curve in mobile processors. The major players have all bought into ARM architecture. Supplying foundry silicon to Apple would be a business and technology win for both companies. And they obviously already do business in the MAC product line.

    In fact with PC shipments declining, Intel probably has excess fab capacity.

    Just my $.02

  • Report this Comment On October 15, 2012, at 8:40 AM, lucasmonger wrote:

    Or maybe Apple will surprise the world again. Another possibility is that they will put Intel Inside, doing a wholesale processor switch just like when Macs switched from PowerPC to Intel Core processors in 2006. Apple is the only company on the planet that owns their entire ecosystem at the moment (Microsoft Surface coming out soon... maybe... but no phones...yet). Intel's recent foray into the foreign 3G phone market shows some promise of increased battery life from the industry leading 22nm processes behind Ivy Bridge desktop CPUs. Swap out the Arm for a future Atom CPU and all of the sudden, neither Samsung or Taiwan Semiconductor is in the running.

    Alas this is just an uneducated non-analyst wild guess that nobody is going to mistake as fact.

    P.S. How come every Anders article causes people to reply to him by name when none of the others seem to elicit this behavior as well as the author's defense of his own writings?

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