By Anu Passary | Oct 16, 2012 10:11 AM EDT
The highly-publicized courtroom battle over patents between Apple and Samsung has deteriorated the relationship between the two technology companies. Now, the relationship seems to be souring even further.
Since the early 2000s, Apple has involved Samsung in designing of Apple's chips. Samsung contributed to the development and manufacturing of the A-range of processors like A5 and A5X. However, it appears Samsung is just manufacturing the chips.
"Samsung's agreement with Apple is limited to manufacturing the A6 processors. Apple did all the design and we are just producing the chips on a foundry basis," said a senior Samsung official.
"There are three kinds of chip clients. Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture. Some want us to just make the chips. Apple is now the third type," said another Samsung official.
Apart from the chips, Samsung has been a major supplier of memory as well as displays to Apple. It may not come as surprise if Apple chooses alternative suppliers for its hardware components.
"It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client,'' said Park Hyun, a senior analyst at Tongyang Securities
Recently, Samsung's top semiconductor designers, Jim Mergard moved to Apple which may sour Apple's relationship with Samsung even further. "The high-profile hiring of someone like Mergard directly from a big rival no doubt increases mutual tension. Apple wants to internalize its management, even for application processors, and to lower its dependency on Samsung for those logic chips,'' said the source.
Korea Times reported that Apple recently signed a deal with Taiwan Semiconductor Manufacturing (TSMC) for the manufacturing of quad-core processors for Apple's future devices.
A report from Barclays indicates that TSMC will start producing Apple's A7 processors from the first quarter of 2014.
MacWorld indicates that Apple is Samsung's biggest customer, accounting for nine percent of the company's revenue. Samsung and Apple rival each other in the technology market, especially when it comes to smartphones and tablets. It is anybody's guess whether Apple is taking a safe stance by weaning off its dependency of hardware components on rival Samsung.
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