Rumors of Apple (NASDAQ:AAPL) making eyes with Taiwan Semiconductor (NYSE:TSM) have persisted for years on end with no fruition. Currently, Apple continues to tap frenemy Samsung for processor fabrication. The most recent batch of A5, A6, and A6X chips are built on Sammy's 32-nanometer manufacturing process.
However, last month The Korea Times reported that Apple continues to explore other options as competitive tensions between the dueling pair escalate. Apple even recently poached a respected chip engineer from Samsung and has allegedly been hiring engineers out of Texas Instruments' (NASDAQ:TXN) marginalized mobile chip division as the iPhone maker continues to develop its chip-designing capabilities.
The next-generation A7 has been rumored to switch to Taiwan Semiconductor's 20-nanometer manufacturing node by the end of next year. These quad-core chips would inevitably find their way into future iDevices and enjoy improved power efficiency.
Another Korean outlet, Chosun Ilbo, is now adding some more details surrounding Apple's presumed move away from its rival: Sammy's jacking up prices by 20%. This is supposedly the first time that Samsung has tried to boost its prices, but since Apple really has no other choice at this point, it was forced to go along. Samsung recently invested an additional $4 billion into its Austin, Texas manufacturing facilities where Apple's chips are produced, so it's likely passing along some of these costs to customers.
What happens when you combine cutthroat competition, overreliance on that same competitor for critical components, global patent wars, and a dash of price hikes? A recipe for a loveless marriage.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple. Motley Fool newsletter services recommend Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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