Earlier this week we reported that Apple may be dropping Samsung as a major supplier of iPhone and iPad parts, and it appears that that report is coming to fruition (at least, partly).  The Wall Street Journal is now saying that Apple has inked a deal with TSMC (Taiwan Semiconductor Manufacturing) for the company to produce iPhone and iPad processors starting in 2014.

Getting to this point hasn’t been easy, for the last several years Apple has relied on Samsung to manufacturer its processor and memory chips, and still to an extent relies on them for the displays as well.  The deal with TSMC has only gone through now because the company has been able to meet Apple’s standards for speed and power.

TSMC plans to start mass-producing the chips early next year using advanced “20-nanometer” technology, which makes the chips potentially smaller and more energy-efficient, and as you probably know, smaller, faster, and less battery usage is always good when it comes to mobile.

Despite the deal, Samsung will remain the primary supplier through next year, one of the TSMC executives said.  I guess Apple is hedging their bets here to make sure TSMC can handle all of the part production.

And despite their fighting in court, the relationship for parts between Apple and Samsung has benefited both parties.  Apple is Samsung’s largest customer, placing orders totaling around $10 billion last year alone.  That’s a lot of money for Samsung to lose if Apple eventually pulled all of their business out of Samsung down the road.

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We’ll see how this deal plays out for Apple and Samsung, it’s definitely worth keeping an eye on.


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