Apple and Samsung have been embroiled in a bitter legal battle spanning multiple product lines and continents, but somehow in spite all the turmoil the two have remained business partners. Digitimes is reporting the two companies' frienemy relationship may have finally reached a tipping point.
According to Digitimes' sources Apple's new processor foundry is Taiwan Semiconductor Manufacturing Company. The source cites the aforementioned legal trouble with Samsung as the driving factor behind the move. If the deal is in fact true, it will mark the first time another company has provided Apple with processors for the iPhone since the phone's release in 2007. Samsung is also the manufacturer for Apple's A5 processor which powers the iPad 2 and is rumored to be powering the upcoming iPhone 5.
The contract with TSMC will apply to 20nm and 28nm processing technologies for the production of Apple's next-generation CPU. The terms of the agreement look to very lucrative for TSMC and kick in the gut to Samsung.
TSMC is believed to have quietly secured Apple’s contract, and even succeeded in extending the deal to cover the manufacture for the A6′s successor, the sources said. In addition, the agreed contract quotes are favorable to bring little impact on TSMC’s profitability, the sources revealed. TSMC managed to negotiate a good price, allowing gross margins yielded by Apple’s orders to be similar to its overall gross margin performance at present, the sources indicated. TSMC’s gross margin for the second quarter of 2011 arrived at 46%.