Apple(s aapl) may rely less on Samsung as an iOS hardware partner, as TSMC is reportedly testing new chips it’s building for future Apple mobile products. Reuters (s tri) notes that Samsung is currently the only chipmaker producing Apple’s A5 chip for the iPad 2; that dual-core chip, or a similar version of it, is widely expected to appear in Apple’s upcoming iPhone. While Apple has previously locked up component deals with multiple manufacturers to help manage supply, the timing of another chip-maker testing its silicon coincides with patent disputes and a corresponding lawsuit between Samsung and Apple.
If Apple does change chip suppliers, it may not be an easy nor a fast process. According to an analyst at NH Investment and Securities, Seo Won-seok, Samsung has deep roots in the chip design and using another supplier could mean more research and development from Apple:
“It won’t be easy for Apple to dramatically change its chip provider from Samsung. 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 (Samsung and Apple) need each other and the relationship will continue.”
This scenario could be Apple’s standard component diversification strategy; companies often don’t want to rely on a single supplier for any one part, let alone the primary CPU of a mobile device. Up to now, Samsung has appeared to have enough capability to produce Apple’s A5 chip as needed, but if that silicon is meant to power a new generation of iPhones, and possibly iPod touch devices — meaning tens of millions of devices — Samsung could be hard-pressed to keep up with demand. Samsung builds chips for its own handsets and has already had to use Nvidia’s Tegra 2 (s nvda) for the Samsung Galaxy Tab 10.1 tablet as well as some of the Galaxy S II smartphones. For both Samsung and Apple’s sake then, it’s possible that another chip-maker could be testing production to limit the potential for component shortages.
Samsung and Apple have been dealing with the patent disagreements for more than year, however, and are now involved in the courts over similarities between Samsung’s Galaxy line of handsets and Apple’s iPhone. Apple was hoping to fast-track the case, but at least one part of it, the briefing process, won’t be accelerated, said a judge this week. Although there are good business reasons for Apple to seek out another CPU fabricator, these two hardware partners can’t be getting along as well as they once did.
Obviously we won’t know if TSMC has won any Apple CPU contracts until new devices arrive and are torn apart, but even without the current lawsuit situation, it simply makes sense for Apple to seek alternative component suppliers as consumers snap up iOS devices in growing numbers.