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Apple Shifting A5 Production From Samsung to TSMC?

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EE Times reports on recent rumors that Apple has parted ways with Samsung for production of the A5 chip used in the iPad 2, instead reaching an agreement with foundry Taiwan Semiconductor Manufacturing Company (TSMC).
Rumors are running rampant that Apple Inc. and Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC) are expanding their foundry ties-a possible blow for Samsung Electronics Co. Ltd.

With little or no fanfare, Apple and TSMC have recently entered into a foundry relationship, sources said. As reported, TSMC will make the A5 dual-core processor on a foundry basis for Apple's iPad 2.
While the rumor had been initially reported by DigiTimes several weeks ago, it appears that the agreement may be more substantial than originally thought, spanning multiple generations of chips.
Apple will use TSMC's 40-nm process for the A5, according to a source. "Apple will also work with TSMC on 28-nm" processes, according to a source.
According to the report, TSMC offers the highest yields and capacity for the 40-nanometer process used for the A5, with the added bonus of Apple being able to shift production away from Samsung, which has become increasingly competitive against Apple's iOS products.

Just last month, a report surfaced indicating that Apple was set to become Samsung's biggest customer with $7.8 billion in contracts for 2011 for a variety of components for iOS devices. Shifting A5 production to TSMC appears to make technological sense for Apple, but also serves to make the company less reliant on Samsung, particularly in the key area of processor technology.

Article Link: Apple Shifting A5 Production From Samsung to TSMC?
 

WiiDSmoker

macrumors 65816
Sep 15, 2009
1,323
1,557
Hermitage, TN
Samsung competes and partners with almost every major technology manufacturer out there; I would find it very odd that Apple would shift away from Samsung just because Samsung makes competing products.
 
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AdeFowler

macrumors 68020
Aug 27, 2004
2,284
278
England
Seeing as Samsung are emerging as a tablet/phone competitor this makes sense, so long as the new contractor is reliable and produces chips of equal quality.
 
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camelsnot

macrumors 6502
Jan 31, 2011
293
0
$teve Job$ layeth the smackdown. First, intentionally misquoting Samsug, lying about their sales and now removing them from their production pipeline. Man.. when Steve's ego gets in the way, heads roll!!! :apple:
 
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cohibadad

macrumors 6502a
Jul 21, 2007
893
5
Less :apple: provided $ to fund Samsung development of competing products. It would be interesting to see potentially how much revenue loss this amounts to for Samsung.
 
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macnews

macrumors 6502a
May 12, 2003
601
2
Idaho
Think this is a smart move and with all the cash Apple has they certainly have the means to through some $$$ at the process.

Would love to see Apple bring production of their chip back on US shores as well. Not sure if Micron can produce chips like this or if they are stuck on memory more than anything but would be nice to see the US producing these internally.
 
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Davichi

macrumors 6502
Feb 23, 2011
282
0
Certainly. Samsung has grown so fast in last 5 years just like apple. If I was apple, I would limit my purchase from LG and Samsung and swift my focus with these other companies. Last year, LG CEO came out and told that they cannot meet the demands for the iPad's panels. Blah blah. Apple will have to delay international launches. Blah blah.

If I was apple, I would have been mad. Why the hell does other companies CEO come out and say Apple might delay international launch? It's not their damn business. Stay away from Samsung and LG. Don't depend on one company. Spread around and keep the competition going.
 
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Mistrblank

macrumors regular
Jun 7, 2010
235
0
Isn't Samsung one of the major suppliers of screens for the iPad still? (I'm more than likely wrong, but posing the question)

It probably has nothing to do with ill will and more to do with good business and driving manufacturing costs down and meeting production goals.
 
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dagamer34

macrumors 65816
May 1, 2007
1,359
101
Houston, TX
We already know that Samsung just landed a $7.8 billion deal with Apple. That doesn't really indicate "shifting away". However, if this story was true about Apple working with TSMC, then it sounds like they are just securing additional supply of their chips so their are NOT reliant on one vendor. Granted, Samsung probably gives Apple first priority in manufacturing, even over itself, but with 40 million iPad projected to sell this year, will Samsung be able to keep up?

The last thing Apple needs is a shortage due to part delays. Less sinister but more practical reasoning.
 
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cmaier

macrumors Core
Jul 25, 2007
19,713
20,635
California
Samsung competes and partners with almost every major technology manufacturer out there; I would find it very odd that Apple would shift away from Samsung just because Samsung makes competing products.

I predicted this on these very forums four or five days ago (i.e. that A5 production would shift to TSMC).

The issue isn't that Apple wants to avoid a competitor - the issue is that TSMC is a superior fab, with lower cost for wafer starts. Very few (any?) companies use Samsung as a fab.
 
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cohibadad

macrumors 6502a
Jul 21, 2007
893
5
$teve Job$ layeth the smackdown. First, intentionally misquoting Samsug, lying about their sales and now removing them from their production pipeline. Man.. when Steve's ego gets in the way, heads roll!!! :apple:

Intentionally misquoting is quite the accusation. He quoted what was widely quoted by all the media. The lady's english was very difficult to understand but she did seem to say smooth instead of small. But I never heard this correction until after Apple's iPad 2 event. And the real test of whether Steve was telling the truth about Samsung's tablet sales would be their numbers. They said how many they stuffed into the sales channels. They didn't say how many were actually sold. Smooth doesn't really convey much but it would seem to imply a number that wouldn't be impressive if explicitly stated to me.
 
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Little Endian

macrumors 6502a
Apr 9, 2003
678
31
Honolulu
Seeing as Samsung are emerging as a tablet/phone competitor this makes sense, so long as the new contractor is reliable and produces chips of equal quality.

The Apple/Samsung relationship is similar to the Nokia/Samsung relationship of the 1980's-90s. Samsung rose to power as a technology giant from learning as a contractor through relationships with Nokia, Fujitsu, Sanyo etc. Samsung has undoubtedly learned a great deal from its relationship with Apple and now has the fledgling ability to compete with Apple in the smartphone/tablet area.

Nothing new here. Same thing happened in South Korea's automotive industry during the same time frame. Hyundai, Kia, and Daewoo learned a great deal from contractual relationships with Japanese/US automakers like GM, Mitsubishi, Yamaha, Toyota, etc. and now they are serious albeit still second rate competitors to automakers around the world.
 
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Freecity88

macrumors member
Sep 23, 2007
71
0
Steve, one advice, don't push samsung too hard, otherwise your ancestors will be proven koreans. :D:D:D
 
Comment

neko girl

macrumors 6502a
Jan 20, 2011
988
0
Intentionally misquoting is quite the accusation. He quoted what was widely quoted by all the media.
Intentionally misquoting a statement that isn't backed up by any sales-to-enduser numbers by Samsung. Jobs is assuming that sales were "poor", since Samsung has yet to produce numbers to back up "smooth". I think it's a fair assumption.

If I'm wrong, I'd like you to produce sales to enduser numbers, not numbers in channel.

On a side note, cool avatar.
 
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Pressure

macrumors 601
May 30, 2006
4,160
404
Denmark
Isn't Samsung one of the major suppliers of screens for the iPad still? (I'm more than likely wrong, but posing the question)

It probably has nothing to do with ill will and more to do with good business and driving manufacturing costs down and meeting production goals.

Apple primarily uses LG panels.
 
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