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Apple Cuts Samsung Out

By Evan Niu, CFA - Apr 12, 2013 at 2:00AM

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A renewed round of reports say that Apple has cut Samsung out of producing its A7 chip, in favor of Taiwan Semiconductor.

The Korea Times is reporting that Apple (AAPL -1.92%) has cut Samsung out of producing its next-generation A7 chip. The Mac maker continues to diversify its component supplier base away from Samsung. Apple has already begun moving display sourcing to LG Display (LPL -1.90%). The A7 business is reportedly going to Taiwan Semiconductor Manufacturing (TSM -3.04%) and its 20-nanometer process. The transition could hurt Samsung, since it would be left with excess unused. Samsung has supposedly been trying to grow its business with NVIDIA (NVDA -4.40%) to mitigate the risk of losing some Apple business.

In the video below, Fool contributor Evan Niu, CFA, explains what it means for investors.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
AAPL
$140.36 (-1.92%) $-2.75
LG Display Stock Quote
LG Display
LPL
$6.71 (-1.90%) $0.13
Taiwan Semiconductor Manufacturing Company Limited Stock Quote
Taiwan Semiconductor Manufacturing Company Limited
TSM
$88.72 (-3.04%) $-2.78
NVIDIA Corporation Stock Quote
NVIDIA Corporation
NVDA
$161.54 (-4.40%) $-7.44

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