Apple may say goodbye to Samsung for quad-core chips

Apple may be changing chip manufacturers as it moves towards quad-core processors in its iOS devices over the next couple of years. While Samsung has produced the chipsets for most iOS devices so far, including the Apple-designed A6 found in the iPhone 5, it may not be the direction Apple will head in the future.

A Citigroup analyst is claiming that Apple will be working exclusively with Taiwanese chip producer TSMC for quad-core processors. The reason for the switch is said to be the efficiency of TSMC's 20-nanometer processes over those of Samsung. Samsung currently uses a 32-nanometer process for the chips in Apple devices, while current quad-core mobile processors, such as the Tegra 3, are between 28 and 45 nanometers. China Economic News Service reports:

Citigroup Global Markets’ market research fellow, J.T. Hsu, pointed out that Apple began verifying TSMC’s 20nm process in August this year and may begin risk production in November with the process. Volume production is expected to start in the fourth quarter of 2013, raising the possibility that TSMC will hike capital expenditure to US$11-12 billion in 2013 and 2014.

Apple has looked at partnering with TSMC in the past, but the chip maker was wary of the reportedly low margins for Apple’s contract suppliers, making them reluctant to bid for contracts with Apple. However, the combination of the large orders for chips that Apple will undoubtedly place, worth billions of dollars, and the possibility of lower cost due to supply chain efficiency, may be enough for TSMC to chage their minds. There are many reasons Apple may wish to move away from relying on Samsung considering the recent legal battles as well as Samsung becoming a bigger and bigger rival in the smartphone and tablet market. If TSMC can meet Apple's demand for chipsets, it's possible that we'll see these processors inside our Apple products in the later part of next year.

Source: China Economic News Service