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Apple Inc. (AAPL) Cutting Chip Relationship with Samsung?

Apple Inc.Apple Inc. (NASDAQ:AAPL) has made it clear that it does not like Google Inc. (NASDAQ:GOOG), and by extension has developed a certain level of antipathy for Samsung Electronics Co. Ltd. , due to its tremendous success with its handsets that are running the Android operating system created by Google Inc. (GOOG).

But while rivalry has grown – especially in courtrooms around the world, where Apple Inc. (NASDAQ:AAPL) continually charges that Samsung violated patents in order to make its highly successful Galaxy line of phones, what was a longtime alliance has now frayed to the point that Apple Inc. (AAPL) and Samsung may not be working together at all much longer.

A report in the Korea Times, from an unnamed source within Samsung, is indicating that Apple Inc. (NASDAQ:AAPL) has reduced its relationship with Samsung’s components arm down to just making the chips for its mobile devices. As the source said, “There are three types of chip clients. Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture. Some wants us to just make the chips. Apple is now the third type.”

Apple Inc. (NASDAQ:AAPL), for the first time, designed its own A6 processor and instead used Samsung to manufacture the chip. Samsung had been a vital partner not just in the making, but also design and architecture of past chips for Apple Inc. (AAPL) devices. Apparently this will be the start of a new non-relationship between the now-heated rivals, as Apple has recently hired away former Samsung chip architect Jim Mergard, who had worked at Advanced Micro Devices (AMD) for 16 years prior to joining Samsung. It’s likely that Mergard is or will be overseeing the development and design of an A7 processor for future mobile devices.

But there is a companion report that Apple Inc. (NASDAQ:AAPL) might be looking to get its future chips built by Taiwan Semiconductor Manufacturing Co., which would be a further departure from Samsung. The company may be able to produce quad-core processors for Apple devices by the first part of 2013.

Will Apple Inc. (NASDAQ:AAPL) succeed by shutting out Samsung? Or will the company be cutting off its nose to spite its face? Surely investors in Apple Inc. (NASDAQ:AAPL) stock – like billionaire fund manager Julian Robertson of Tiger Management – know that Apple had a relationship with Samsung for a reason and was successful; is this battle worth risking that synergy?

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