Apple A7 Chip: If you have not been keeping up with the saga between Apple Inc. (NASDAQ:AAPL) and Samsung, you are missing quite the show. Not only are the two companies battling it out for top spot in the smartphone arena, but they are also locked up in courtrooms all over the world. What is next?
Now, it is being reported by the Korea Times that the two companies are about to part ways as Apple Inc. (NASDAQ:AAPL) prepares to develop A7 application processors for release next year.
Although Samsung may not be too happy about this, it makes perfect sense for Apple. After all, they don’t want to get too close to the company that is battling them so hard for market share. And of course, the courtroom tension is not helping in the least bit.
The following quote comes from an executive at one of Samsung’s local partners in Korea:
“’Apple is sharing confidential data for its next A7 system-on-chip (SoC) with the Taiwan Semiconductor Manufacturing Company (TSMC). TSMC has begun ordering its contractors to supply equipment to produce Apple’s next processors using a finer 20-nanometer level processing technology.”
With Apple Inc. (NASDAQ:AAPL) out of the picture, Samsung will be looking for new ways to keep this part of its business alive.
The Cupertino-based company has already kicked Samsung to the curb as far as display manufacturing is concerned. Now, it is doing the same with its chips.
In the same North Korea Times piece, another parts supplier official is quoted as saying:
“’Apple is cutting the use of Samsung displays for its products. Now the deterioration of ties has expanded to chips. You should remember that the application business is one of Samsung’s new growth engines in which the firm is heavily investing.”
Despite the fact that this was a solid working relationship for many years, it makes good sense for both Apple Inc. (NASDAQ:AAPL) and Samsung to part ways. At some point, both companies will be standing alone and not relying on each other for anything. This is when things will really begin to heat up.
Whether or not Samsung can convince Apple Inc. (NASDAQ:AAPL) to use it for future chip manufacturing has yet to be seen. However, things are not looking good.
Do you think this is a good move for AAPL? Or do you believe the company should continue to rely on Samsung despite the battle for market share and ongoing legal drama? Share your opinion in the comment section below.
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DISCLOSURE: I have no positions in any stock mentioned.
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