Will Apple Have to Get Back With Samsung?

Apple (NASDAQ: AAPL  ) wants to move away from Samsung. This we know. While the South Korean conglomerate has many independent divisions, Apple doesn't like giving the component segment business while the smartphone segment is its most viable competitor. To that end, the surest signs yet have emerged that Apple has inked a three-year deal with Taiwan Semiconductor (NYSE: TSM  ) .

The Mac maker is reportedly on board for 20-nanometer, 16-nanometer, and 10-nanometer production at TSMC over the next few years, compared to the current 32-nanometer process used at Samsung right now. Well, The Korea Economic Daily doesn't necessarily think that's the case, and now says that Samsung has scored a contract to supply Apple with 14-nanometer A9 chips in 2015. Those processors would power the future "iPhone 7."

The report does corroborate the news that Apple is going with TSMC for 20-nanometer production of A8 processors, but says Apple will be switching back to Samsung for the following generation. Samsung has a technological lead with its 14-nanometer process, giving Apple little choice but to get back with its biggest rival.

Separately, Piper Jaffray analyst Gene Munster believes that TSMC has been having problems with its 20-nanometer process. Intel has numerous manufacturing advantages, but it may not have the infrastructure or intellectual property necessary for the specific types of chips that Apple needs. Short of investing in its own foundry (which has been long-rumored as well), Apple might be stuck with Samsung for the foreseeable future.

Collaborating with Samsung's semiconductor division entails sharing details about product forecasts and roadmaps, the last thing Apple wants going to its biggest competitor. Even if Samsung has an adequate information firewall between its semiconductor business and smartphone operations (which is debatable), there's no question that enriching the component side inevitably helps fund development for Samsung's Galaxy lineup.

Breaking up is hard to do.

Apple has a history of cranking out revolutionary products... and then creatively destroying them with something better. Read about the future of Apple in the free report, "Apple Will Destroy Its Greatest Product." Can Apple really disrupt its own iPhones and iPads? Find out by clicking here.


Read/Post Comments (1) | Recommend This Article (4)

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 July 16, 2013, at 4:41 AM, H3D wrote:

    "Will Apple Have to Get Back With Samsung?"

    Particularly in a recession, customers are much harder to get that suppliers.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2538251, ~/Articles/ArticleHandler.aspx, 10/20/2014 5:21:39 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement