Keep your friends close and your enemies even closer. Good advice, but you can still get a bit too close to a heated rival.
Rumors and ethereal reports would have it that tech juggernaut Apple (Nasdaq: AAPL) is about to cut ties with Korean all-rounder Samsung at its earliest convenience. The rumor mill suggests that Apple's A6 processors, which will be the heart of the 2012 generation of iPads and iPhones, will move out of Sammy's factories and into the cozy new production digs at Taiwan Semiconductor Manufacturing (NYSE: TSM).
This makes sense from a ridiculous number of angles:
- Samsung and Apple are duking it out in lawsuits around the globe, accusing each other of prying trade secrets out of the current partnership. Eliminate the partnership, and the legal issues will stop eventually.
- Early iPhones ran on ARM Holdings (Nasdaq: ARMH) designs under the Samsung brand. Apple has since moved the chip design in-house under its own ARM license and uses Samsung only as a manufacturer now. There's nothing stopping a further separation from a technical standpoint.
- TSMC already fabs ARM chips of many stripes, including the Qualcomm (Nasdaq: QCOM) Snapdragon, NVIDIA (Nasdaq: NVDA) Tegra 2, and Marvell (Nasdaq: MRVL) Armada. Adding one more variation of a well-known concept should be a snap from the manufacturer's perspective.
There's very little glue binding Samsung to Apple now, especially since they're direct competitors in personal computers (this story was written on a Samsung laptop, not a MacBook Air), mobile gadgetry, and general consumer electronics. I say the storied relationship will end as soon as current contract terms and pipeline logistics allow.
To make the split complete, Apple could also stop buying DRAM and Flash memory chips from Samsung and shift to chips supplied by Micron Technology (Nasdaq: MU), Toshiba, and/or Spansion, among many other suppliers in this commodity sector. Exactly how Apple would divvy up those memory orders is uncertain, but TSMC is nearly a lock for the bigger processor orders.
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