Apple trials TSMC for chips after Samsung feud

TSMC has started trial manufacturing of next generation A6 chips for Apple, a source familiar with the matter said, in a sign that the iPad maker is shifting from its traditional chip supplier, Samsung.

Whether TSMC would get actual orders for the chips would depend on its yield rate, or the amount of chips per batch that come out with no defects, the source told Reuters.

Samsung is the sole supplier of the A5 chips used in the iPad 2, but Apple has hinted it’s keen to diversify its supply chain from the Korean company.

TSMC has got all the authorisation and details ready. Whether Apple puts in a formal order will depend on the yield rate

Samsung has emerged as Apple’s toughest competitor in the smartphone and tablet market and is involved in an acrimonious legal battle with Apple over patents.

“TSMC has got all the authorisation and details ready. Whether Apple puts in a formal order will depend on the yield rate,” said the source, who was not authorised to speak to the media. The source did not provide further details of the orders.

TSMC spokeswoman Elizabeth Sun told Reuters she could not comment on this issue or on market rumors. Apple was not immediately available for comment and a Samsung spokesman declined to comment.

Analysts and other sources had previously said TSMC was set to become a supplier of some processor chips to Apple, likely starting next year. However the chip may not be called A6, the sources said.

Some analysts expect Samsung to dominate A5 orders and said any switch by Apple could be tricky.

“It won’t be easy for Apple to dramatically change its chip provider from Samsung,” said 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 need each other and the relationship will continue.”