Apple Chip Company Purchase Makes Samsung Deal Short Term

| Analysis

Despite striking deals with TSMC and Samsung for custom chip manufacturing, Apple has reportedly bought its own fabrication company. Assuming the rumors are true, Apple's deals with other companies -- including TSMC and Samsung -- for iPhone and iPad chips may be short term.

Buying a chip maker means Apple would rely on companies like Samsung even lessBuying a chip maker means Apple would rely on companies like Samsung even less

Sources speaking with SemiAccurate said that Apple has completed its purchase of a chip fabrication company, and Tom's Hardware said Apple may have purchased United Microelectronics Corporation -- one of the big players in the chip fabrication market.

Apple is currently using TSMC to make the processors that drive the iPhone, iPad and iPod touch, and a report just surfaced saying that the company has turned back to Samsung for future iPhone processor construction in 2014 and 2015.

If Apple really has bought a company to make its A series processors, it seems reasonable that it wouldn't be able to take over production of its own chips immediately. Instead, relying on TSMC and Samsung would be a short term solution while the company ramps up for its own production.

Buying UMC would give Apple more control over its chip production process and let the company keep its proprietary designs a little more secret since it wouldn't need to share any of that information with third-party companies. UMC makes chips for a long list of companies, too, so Apple could leave those deals in place and generate extra revenue as a chip maker.

It's also possible Apple will leave UMC to run as an independent company while giving its own chips priority in the production schedule. That would leave UMC open to continue making chips for its long list of customers and to go on generating its own revenue.

Apple hasn't confirmed it bought UMC, or even that it's been in the market to buy a chip manufacturing company. Considering the company's need to always be in control, however, it makes sense that Apple would at least look into running its own chip making process. If Apple really did snap up UMC, start looking for new chips in the iPhone and iPad in 2016.

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4 Comments

skipaq

I saw this rumor last week. UMC has not moved in stock price since I started tracking it a week ago. I am not sure this rumor is true.

ctopher

UMC advertises 300mm fab at a 28nm process node. Samsung is up to 14nm process. I wonder if UMC isn’t advertising its capabilities or if Apple is investing for these advanced processes and not purchasing the entire company.

sym

Apple is STILL buying processors from Samsung?  Or in other words, Apple STILL can’t make it’s own processors?  This is a joke.  BTW - this story/rumor has not materialized.  So let me get this straight, Apple still relies on Samsung for touch screens and processors??  Where’s Bryan Chaffin?!  The great white hope.  He needs to spin this in a way that makes Apple look smart.  He needs to find the ‘chink’ in the armor here.

sym

Apple hasn’t confirmed it bought UMC, or even that it’s been in the market to buy a chip manufacturing company.

THEN WHAT’S THE POINT OF THIS ARTICLE?!?

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