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January 3, 2013

Apple Removing A6X Production From Samsung in Favor of TSMC

It looks like another nail has been put into the coffin of Apple’s business relationship with Samsung.

According to news reports, the iPhone maker has asked Taiwan Semiconductor Manufacturing Co. (TSMC) to produce the next generation of its A6X processors for its iPads.

According to Taiwanese business newspaper the Commercial Times, as translated by AFP, Apple has granted TSMC a trial production of its A6X processor during the first quarter. It is thought Apple will decide after the trial period if TSMC will be handed the entire A6X processor order.

Apple designs its own mobile device processors but contracts with other companies to build them.

The move can’t come as much of a surprise to Samsung — the current supplier of the A6 and A6X processor — given the strained relationship between it and Apple. It has been speculated for some months that Apple would remove production from Samsung altogether.

It was reported last year Samsung has been raising its prices due to its ongoing rivalry with Apple, although the company has denied such reports.

Apple and Samsung, who are estimated to have done $12 billion in business together last year, are embroiled in a patent fracas in 10 countries as each accuses the other of copying one another’s mobile devices.

Apple in August was awarded $1.05 billion after a jury in August ruled Samsung violated six of Apple’s patents. If the ruling holds up, it will set the record as the largest patent verdict in history.

Apple has asked Federal Judge Lucy Koh to augment the damages by $536 million.  Samsung, however, maintains the damages should be chopped by more than $600 million.

Both firms have since filed new legal complaints as the companies continue to accuse one another of patent infringement. The lawsuits address software and user interface patents, which could mean Google, maker of the Android operating system, may be dragged into the dispute.

Koh is set to hear the case in 2014.