Apple-Samsung Deal Regarding Chips Likely to be Off

October 13, 2012, By Sanjeev Ramachandran

For the last few months, the deal between the two electronic giants, Apple and Samsung, has turned havoc and it looks like the deal will be off in a short time.

At the same time, there is also news regarding Apple’s hiring of a 16-year AMD chip veteran who could allow the firm to shift A-series processor production away from Samsung. But the move could also have implications for Intel, which supplies CPUs for Macs.

Apple is currently reliant on Samsung to manufacture the A5 and A6 processors used in the manufacture of millions of iPhones, iPads and iPod touch devices. But while the actual silicon manufacturing process is carried by Samsung, the design work is carried out by Apple.

But as per sources, Apple is currently shifting their business to the Taiwan Semiconductor Manufacturing Company owing to their advanced 20nm process.

In 2008, Apple acquired processor design company PA Semi, a move that allowed the company to bring its chip design work in-house.

This allowed the company to design the A-series processors used in iPhones and iPads. As more chip expertise enters Apple, the company’s reliance on Samsung diminishes, and this could allow the company to shift production to another firm and it has already begun.

But the main concern for Apple is that Samsung is the only supplier of micro processors for the iPhone and iPad and it also supplies DRAM and NAND-type memory chips and flat screens used in the popular Apple gadgets.

Samsung products comprise 26% of the component cost of the iPhone and if the deal is broken, Apple should find a way to compensate for all these products.

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