c|net: Samsung official cites serious chip rift with Apple – report

Samsung has probably been the largest single component supplier to Apple and has collaborated with Apple on chip development. That relationship may be coming to an end, according to a report.

iPhone 5 circuit board: Samsung makes the A6 chip for Apple and supplies other parts like flash memory and displays. That multibillion dollar supply relationship could be in jeopardy, according to a report.

Samsung’s multibillion dollar component supplier partnership with Apple is beginning to unravel, according to a South Korea-based report, which quotes a Samsung official.

Though Samsung makes Apple’s newest A6 chip used in the iPhone 5, the relationship between the two companies has changed substantially, according to a report in Korea Times.

“Apple…has made it clear it will no longer use its rival’s technology, according to a senior Samsung official,” the report said.

The report continues, quoting an anonymous Samsung official speaking about the A6 chip. “Apple did all the design and we are just producing the chips on a foundry basis.”

That’s a change from the past, when Apple worked with Samsung on chip development and/or design.
And the report goes on to say — citing a Barclay’s report — that Apple will consign future A7 chip production to Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chip manufacturer (or so-called foundry).

That of course depends on whether TSMC is up to the task, since moving Apple chip production from Samsung to another foundry would be a monumental undertaking.

The rift could extend to other components too. Samsung has been a major supplier of memory and flash chips as well as displays to Apple, among other components.

“It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client,” said Park Hyun, a senior analyst at Tongyang Securities, who is quoted in the story.
Needless to say, the intensely acrimonious legal wrangling between the two companies is contributing to the meltdown in the partnership.

A key chip architect has left Samsung for Apple, according to a report on Thursday.

And on Friday, CNET reported that Apple is turning to TSMC for future chip production.

From: http://news.cnet.com

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