Apple Inc. (AAPL) and this Supplier Come to Terms on Huge Deal

As you probably realize at this point, Apple Inc. (NASDAQ:AAPL) is only as good as its supply chain. This is not to take anything away from the bright minds that work at company headquarters in Cupertino. That being said, Apple relies heavily on its supply chain to keep product production moving in the right direction at all times. Along with this, Apple’s supply chain helps ensure the overall quality of its products.

According to a recent report by Digitimes, Taiwan Semiconductor Manufacturing Company (TSMC) recently closed a deal with Apple Inc. (NASDAQ:AAPL) to “supply foundry services for the next A-series chips built using 20nm, 16nm and 10nm process nodes.”

Not only is this big news for Apple Inc. (NASDAQ:AAPL), but the same holds true for TSMC. This company relies heavily on Apple to continue sending lots of business its way.

This deal is set to take off in the near future, with the following timeline in place:

“TSMC will start to manufacture Apple’s A8 chips in small volume in July 2013, and substantially ramp up its 20nm production capacity after December, the sources revealed. The foundry will complete installing a batch of new 20nm fab equipment, which is capable of processing 50,000 wafers, in the first quarter of 2014.”

The new Apple Inc. (NASDAQ:AAPL) A8 processor and A9/A9x chips will be used in upcoming iPhone and iPad devices.

At this point in time, nobody knows for sure whether or not TSMC is going to be the only suppler of these Apple Inc. designed chips. There is a chance that another company could be brought into the fold to avoid any issues with keeping up with demand.

Here is more from the Digitimes piece, explaining which TSMC facilities will be working on the project:

“TSMC’s phase-4, -5 and -6 facilities of Fab 14, its 12-inch fab located in southern Taiwan, will be dedicated to making Apple’s A-series processors, the sources further noted. The foundry will initially allocate a capacity of 6,000-10,000 12-inch wafers for the manufacture of those chips.”

For Apple Inc. (NASDAQ:AAPL), it is good to know that they have things taken care of in terms of a solid supplier. On the other side of things, TSMC will be able to benefit from this relationship as well.

This type of mutually beneficial setup is when the best business between companies takes place.