Samsung Electronics Co., Ltd. (KRX:005930) is expected to start producing the Apple Inc. (NASDAQ:AAPL) next generation A8 processor at its plant in Austin, Texas, according to sources with ZDNet.
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Apple and Samsung are two of the biggest friends and foes. Apple is one of Samsung’s largest customers, but the companies are in court facing off over patent disputes. According to a report by NPD DisplaySearch, Apple is actually becoming more and more dependent on Samsung as a supplier though.
Apple and Taiwan Semiconductor Manufacturing Co (TSMC) have signed a deal. TSMC will manufacture chips for Apple’s mobile devices starting in 2014. A TSMC executive has confirmed the deal, according to the Wall Street Journal. It took a while for the deal to happen because of glitches that prevented the chips from hitting Apple’s speed and power standards.
Apple may be shifting production of mobile device processors to the Taiwan Semiconductor Manufacturing Company (TSMC) very soon according to Taiwanese newspaper The Commercial Times. It is rumored that TSMC will begin the production of the A6X in the first quarter of 2013. The Commercial Times is not known for always being accurate when it comes to rumors, but we do know that Apple has been wanting to shift away from their dependence on Samsung for a long time now because of all the lawsuits.
According to South Korean daily newspaper Chosun Ilbu, Samsung has increased the price of mobile processors for Apple by 20%. Chosun received information about the negotiations from someone familiar with the companies. Apple attempted to walk away from the deal, but had nowhere to go for a replacement manufacturer.
Apple and Qualcomm have both put in investment bids that topped at around $1 billion in an effort to secure exclusive access to chip supplies from Taiwan Semiconductor Manufacturing Company (TSMC), but the bids have been declined since the company wanted to retain flexibility for their production. Apple is clearly trying to lessen their dependence on Samsung for their product supplies.
ASML is a publicly listed Dutch company that makes lithography systems for the semiconductor industry. Samsung has acquired 3% of the company for 503 million Euros ($629 million). Samsung will contribute 276 million Euros ($345 million) to ASML’s R&D of lithography technologies over the next 5 years as well. This is a total of $974 million in total, which is almost the same amount of money that the company has been charged to pay Apple.