Apple has allegedly inked a deal with chipmaker Taiwan Semiconductor Manufacturing Co. to produce the A5 chip for the iPad 2, a move that is seen as a potential loss for Samsung.
Apple is rumored to have entered a foundry agreement with TSMC to build the A5 processor, according to EETimes. In addition to powering the new iPad 2 set for release on Friday, Apple’s custom dual-core A5 processor is also expected to power the anticipated iPhone 5, expected to debut this summer.
Apple is expected to spend $7.8 billion on components from Samsung alone in 2011, for parts including liquid crystal displays, processors and NAND flash memory chips in mobile devices including the iPhone and iPad. The deal would make Apple the largest customer of Samsung.
The EETimes report said Apple is making the switch for three reasons, one of them being the fact that Samsung competes with both the iPhone and the iPad with its own devices.
Apple, according to the source, will use TSMC for three reasons: 1. Samsung competes with the iPhone and iPad; 2. TSMC has the highest yielding 40-nm process in the foundry world; and 3. TSMC has the most 40-nm capacity.