The fierce rivalry between Apple (NASDAQ:AAPL) and Samsung is increasingly hurting their other long-standing business relationship. Apple, which has used mobile processors designed and manufactured by Samsung for several years, has informed its rival that it will no longer need its design expertise, a senior official at the Korean company told The Korea Times. According to the report, the relationship between the two was on its way to becoming “one-dimensional,” with Apple doing its designing on its own and Samsung only manufacturing the hardware.
“There are three types of chip clients,” the unnamed Samsung official reportedly said. “Some want us to handle everything from chip design, architecture, and manufacturing. Some want us to just design and manufacture. Some want us to just make the chips. Apple is now the third type.”
Apple has been a huge winning stock pick for Wall St. Cheat Sheet Newsletter subscribers. Don’t waste another minute — click here and get more of our CHEAT SHEET stock picks now.
While Samsung is currently the only semiconductor manufacturer that appears to be able to meet Apple’s high-volume chip demand quickly, the latter is trying to decrease its reliance on its rival more and more. The A6 processor used in the iPhone 5 was developed by Apple, with no contribution coming from Samsung in the designing of the processor’s ARMv7 core. The iPhone maker is also said to be planning to recruit Taiwan Semiconductor Manufacturing (NYSE:TSM) to build quad-core 20-nanometer chips by as early as next year.
“It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client,” Park Hyun, a senior analyst at Tongyang Securities, told The Korea Times.
Last week it was also reported that Apple had hired Samsung chip designer Jim Mergard.