Is Apple Ditching Samsung For This New Partner?

It may be the end of an era. Apple (NASDAQ:AAPL) and Samsung’s (SSNLF.PK) rivalry seems to be driving the iPhone maker to switch to Taiwan Semiconductor Manufacturing Co. (NYSE:TSM) as its chief supplier of mobile device chips.

Is Apple now a once-in-a-decade buying opportunity? Click here to get your 24-page Ultimate Cheat Sheet to Apple’s Stock now!

From the beginning, Samsung has built Apple’s mobile A-series chips, which have been powered iPads and iPhones since 2010. Even the latest chips in the iPhone 5 and fourth-generation iPad are made by the company’s Korean competitor.

But, the tense rivalry between Apple and Samsung — which has put the two companies head to head in courtrooms around the world — could be slowly bringing an end to their business partnership. Chips could be one of the first things taken out of the relationship.

A report from Taiwan’s Economic Daily News suggested that Apple is planning to build its next chip — currently referred to as the ”A7″ — on a 20-nanometer process next year. TSMC’s plans to roll out a chipset of that size next year have given credence to the rumor that Apple may be contemplating a manufacturer switch. TSMC CEO Morris Chang has already expressed his excitement over the new chips, making a prediction that they will outsell its current 28-nanometer chips in the first 2 years of production…

The combination of news on the chip coming out from TSMC and Apple’s intention to switch to that same size, along with the expiration of Apple and Samsung’s chip contract, seems like too much to be simple coincidence.

NEW! Discover a new stock idea each week for less than the cost of 1 trade. CLICK HERE for your Weekly Stock Cheat Sheets NOW!

Speculation that Apple would look to TSMC for chip manufacturing has been around for some time, and the pieces of the hypothesis have started coming together. TSMC has been heavily investing in its production facilities, which could just be one more sign that it’s preparing for Apple as a big new customer. The arrangement would certainly benefit TSMC. But it could also allow Apple to breath easier, as the move would be a blow to Samsung because Apple has been one of the company’s larger customers over the years.

Don’t Miss: Did Apple Miss This Fad on Purpose?