Are Apple and Samsung Calling It Quits?

Samsung (SSNLF.PK) is reportedly looking for new clients to sell its mobile processing chips to, suggesting that the supply relationship with Apple (NASDAQ:AAPL) may be close to ending. According to a report from Reuters, Apple has substantially reduced its reliance on Samsung, instead moving its silicon production to Taiwan Semiconductor Manufacturing Company (NYSE:TSM).

The Korean company, meanwhile, is considering a shift to Chinese markets to overcome the possibility of a chip sales shortfall. Samsung’s processors also power its own line of Galaxy mobile devices in addition to Apple’s iPhone, iPod, and iPad lines.

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“As there are just two smartphone makers that are doing really well, chipmakers supplying them have grown in tandem,” Stephen Woo, the president of Samsung’s System LSI business told Reuters. “So we plan to bolster our relationship with those key customers. (We) should diversify our customer base and are making such efforts already, adding some Chinese customers.”

The relationship between Apple and Samsung, which has been a supplier to the iPhone maker for years, has increasingly become strained as the companies continue their global rivalry in the smartphone and tablet market. The two are also battling each other in several patent infringement cases in courts worldwide.

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According to a Goldman Sachs estimate, Samsung’s mobile chip sales from Apple will rise to 9.3 trillion won, or $8.8 billion, in 2013. But if Apple were to take even 30 percent of its business away next year, sales could fall to just 2.5 trillion won.

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