Are Apple Inc. (AAPL) and Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM) Together at Last?

Page 1 of 2

Talk of Apple Inc. (NASDAQ:AAPL) and Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) pairing up has been around for ages. The largest contract chip manufacturer in the world has never scored a direct deal with Apple, even as some of its chips inevitably find their way into iDevices via other companies.Tensions between Apple Inc. (NASDAQ:AAPL) and Samsung have steadily risen, even as Samsung currently produces the processors for iDevices. That whole product-copying-and-global-patent-war thing doesn’t bode well for business relationships. It should be obvious why Apple is interested in moving chips away from its frenemy, and the two primary candidates have always been Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) or Intel Corporation (NASDAQ:INTC), or some combination thereof.

Apple Inc. (NASDAQ:AAPL)

Rumors resurfaced last week about Intel and Apple Inc. (NASDAQ:AAPL) exploring a foundry deal, following Intel’s announcement that it would begin producing 14-nanometer chips for Altera Corporation (NASDAQ:ALTR) in a similar capacity. Altera’s not nearly as big a fish as Apple, and many analysts think it could pave the path for Intel and Apple to get together at last.

Knowing where to look
However, it turns out that there may be evidence that Apple is now working directly with TSMC. The company recently upgraded its Apple TV set-top box without fanfare. Initial reports based on FCC documents suggested the device could carry an upgraded A5X chip, the same one found in the third-generation iPad. It turns out that the device ended up carrying the same A5 chip as before — except with one notable difference: it was much smaller physically.

There has been a die shrink with the processor, which points to a smaller manufacturing node. It’s going to require some deeper digging from specialists like Chipworks to determine the true origins of the silicon, but this could very likely be the first A-chip made by TSMC for Apple, potentially on TSMC’s 28-nanometer process.

Don’t stop me if you’ve heard this one before
When transitioning to smaller manufacturing nodes, Apple Inc. (NASDAQ:AAPL) has been known to test new processes out on low-unit products in order to minimize risk should things turn sour.

For example, when progressing from Samsung’s 45-nanometer process to its 32-nanometer process, Apple Inc. (NASDAQ:AAPL) used the iPad 2 as a testing ground after it released the iPad 3. Since the older-generation model wouldn’t fetch as many sales, if the new manufacturing process proved problematic it wouldn’t be the end of the world, since it wouldn’t threaten sales of the flagship device. The updated iPad 2 enjoyed better battery life as a result of the improved power efficiency.

Page 1 of 2

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The World’s Most Famous Circuses

Best Hair Stylists

Most Popular NASCAR Drivers

The Best Romance Movies of all Time

The Most Wanted Drug Lords

The Oldest Money Managers

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!