Apple Apparently Ditches Samsung for TSMC Chip Fabrication

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Apple’s strained relationship with Samsung has apparently taken yet another turn for the worse, this time with Samsung allegedly losing its deal to make chips for Apple’s products. Industry insiders claim Apple has dropped Samsung in favor of Taiwan Semiconductor Manufacturing Company for the next versions if its custom designed processors, according to DigiTimes.

Apple and Samsung have been locked in a legal battle over patent infringement claims for several months. Both companies have alleged that the other’s mobile devices use patented technologies without proper licensing, and have filed lawsuits against each other in the U.S. and other countries.

Apple cozies up with TSMC for chip manufacturingApple cozies up with TSMC for chip manufacturing

Assuming the insider sources are correct, those courtroom fights may have put too much of a strain on the two company’s business relationship.

A German court recently upheld an injunction blocking the sale of Samsung’s Galaxy Tab 10.1 tablet in the country. The company filed an appeal earlier this week in hopes of overturning that ruling.

Apple was also awarded a temporary injunction through a Dutch court blocking the sale of some Galaxy devices in the European Union, and Samsung has agreed to postpone sales of its Galaxy Tab 10.1 tablet in Australia until the end of September.

Should Apple take its chip fabrication to TSMC, the deal will be a big blow to Samsung since earlier this year the company was ramping up to quadruple its chip production to meet Apple’s needs.

Apple, Samsung and TSMC haven’t commented on the report.

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How many times are you going to report on this rumour without referencing your previous reports on it?


DigiTimes has been noted as a source though it uses such words as industry sources claim, according to the sources. . , Industry speculation, is believed, etc.

Yup. No assurance there, though it does get hopes up and it seems only reasonable that a company having problems with a source manufacturer would seek out other sources. But Apple is famously tight lipped.

As a betting man, I’d say it is so. But, experience tells me that doesn’t make it so.


Is there any doubt that Apple will move as much business as possible from Samsung, after Samsung has decided to compete against Apple is its two of its main lines of business?  Even if Samsung isn’t infringing on Apple’s IP, which it may very well be doing, neither Samsung or anyone else can reasonably expect Apple to do any more business with Samsung than is absolutely necessary.  Certainly, Samsung, if there is any wisdom in its management, must have expected that Samsung’s move to compete with Apple’s iPad and iPhone with Android-based tablets and smartphones would result in losing the bulk, if not eventually all, of Apple’s $7 billion a year in orders. 

So Samsung must be expecting that the profits that it will get from Android devices will not only replace but exceed the profits that it received from selling components to Apple.  However, Samsung’s treachery may receive its just deserts, because (1) their tablet business hasn’t been very successful, and Apple’s infringement suits threaten what little success, if success it can be called, Samsung has had with tablets, and (2) Google’s purchase of Motorola Mobility (Moto) threatens that all other Android OEMs, including Samsung, will be second class citizens, who won’t be able to fully compete against the very company, Google/Moto, that is supplying Android, their mobile OS.

And that second point is perhaps already causing Samsung to regret its decision to rely on Android to compete against what had been its biggest and best customer, Apple Inc.  Though all of the Android OEMs dutifully professed support for Google’s decision to purchase Moto, it has been reported they all, especially Samsung, have taken steps to at least hedge their bet on Android, if not taken steps to outright diversify to other mobile operating systems and thereby diminish their reliance on Android.

So if the infringement suits facing Android or Google’s treachery with Moto cause the impairment of Samsung’s Android business, it is prepared or is preparing to have a mobile device business without Android.  But that business, certainly is unlikely to be as profitable as the business that Samsung had with Apple.


I would expect Apple to do business with Samsung, whether the companies are competing or not, as long as Samsung sells things that Apple wants at a good price. Moving sales elsewhere won’t stop Samsung from competing.

Now it is an entirely different matter whether Apple should do business with a company that rips off Apple’s iPad design or not. And I think Samsung and its shareholders should think hard whether they aren’t losing more money if sales of electronics parts go elsewhere then they will make by copying the iPad design. Especially as there isn’t that much reason to _copy_ the iPad, as Sony proves.

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