Suddenly, Foxconn isn't the best Asian play on the rising popularity of Apple's (Nasdaq: AAPL) iPhone. Citing unnamed sources, Reuters says the Mac maker is using Taiwan Semiconductor Manufacturing (NYSE: TSM) to develop its A6 mobile processor on a trial basis.

Neither Apple nor Taiwan Semi is up much on the news. I suppose I get that -- this is Google's day, after all. But doesn't TSMC at least merit a closer look? The implications of a potential partnership here are huge, especially now that the iPhone 5 is reportedly just months away.

No one knows precisely why Apple would choose to mix it up with suppliers at such a critical time, but trade magazine EE Times has a theory. Reporter Peter Clarke says relations between Apple and Samsung, its manufacturing partner for the A4 and A5 chips, have cooled ever since the South Korean electronics giant got into the Android device development business.

I can see that. I can also see how sponsoring free copies of the new Galaxy Tab and Chromebook for attendees of Google's I/O developer conference probably didn't help matters.

Not that leaving Samsung would be easy for Apple. The iPhone is a complicated device with a custom-designed chip. There aren't many capable of manufacturing it on a mass scale. Unlike regional peers United Microelectronics (NYSE: UMC) and Semiconductor Manufacturing International (NYSE: SMI), TSMC is in that exclusive club.

Still not convinced that Taiwan Semi is the best play on the iPhone 5? Consider these three facts before you answer:

  1. Taiwan Semi trades for a discount to the industry average multiple (11 vs. 14.8).
  2. The stock yields 3.3% in dividends annually.
  3. Founder Morris Chang remains involved, 24 years after starting the company.

Add it all up, and mix in a fat contract from Apple, and there's little doubt in my mind that Taiwan Semiconductor remains Asia's top chip stock. Do you agree? Disagree? Tell us what you think using the comments box below.

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Fool contributorTim Beyers is a member of theMotley Fool Rule Breakers stock-picking team. He owned shares of Apple, Google, and Taiwan Semiconductor at the time of publication. Check out Tim'sportfolio holdings andFoolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insightsdelivered directly to your RSS reader.

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