If a new report is to be believed and a previous rumor which we covered, Apple is planning to shift production of the A6, which is believed to be the company’s next-generation mobile processor, away from Samsung, in light of patent disputes between the two companies.
Apple’s current mobile processor, the Apple A5, although designed by the Cupertino company, is manufactured exclusively by Samsung: it’s been this way ever since the company has begun engineering its own processor that goes into all of Apple’s iOS-powered devices, namely the iPod touch, the iPhone and the iPad. According to a source familiar with the matter, Apple might be getting ready to contract another supplier to manufacture its next-generation chip, known in the tech world as the “A6” (although it’s being reported today that it might have a different name). The new supplier is rumored to be TSMC, which also manufactures processors for ARM Holdings, another prominent chip developer.
Moving away from Samsung can prove to be difficult, since the Korean Company owns some of the intellectual property used by Apple, as pointed out by Fubon Securities analyst William Wang, who suggested that the Cupertino company might instead only shift partially away from Samsung, granting TSMC a smaller percentage of the overall orders:
I think TSMC will get the new chip orders, the issue however is allocation. Apple won’t give the whole 100 percent to TSMC. Maybe it’ll allocate only 20-30 percent.
Instead of moving away from Samsung Electronics completely, Apple might instead be looking into diversifying its supply chain, much like it’s doing with the assembly of the iPhone, with more suppliers being awarded contracts. It’s also possible that Apple simply doesn’t hire TSMC to build the same chips that are currently being manufactured by Samsung, in order to avoid possible intellectual property liabilities. Instead, Apple might choose to redesign the whole chip, as speculated by Seo Won-seok, an analyst at NH Investment and Securities in Seoul.
It has to redesign the chipset, which Samsung has been deeply involved from the beginning and has some intellectual property. Apple could try various suppliers but they (Samsung and Apple) need each other and the relationship will continue.
Of course, this change depends on whether TSMC manages to meet the conditions for building Apple chips, such as being able to produce them cheaply with few defected items per batch. Samsung might also begin charging Apple drastically less for building chips in order to remain competitive.
The company that builds the iPhone’s hardware shouldn’t have any difference in user experience at all. Apple conducts supplier changes frequently and none of them are visible once the final product is assembled.