While we covered this story back in January, there seems to be a new indirect confirmation this morning out of Asia that Apple is shifting their A7 processor business to TSMC. A new Asian report published this morning states that the "chasm between Samsung Electronics and Apple is expected to widen further as Apple has excluded its Korean rival from a project to develop A7 application processors, due to be released in the first half of next year. One of Samsung's local partners in Korea stated this morning that ''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."
Unlike conventional memory chips, which are only used to write and store data, application processors are used to power computing devices, and are more profitable and less volatile price-wise. Apple has been paying Samsung billions for their application processors found in iPhones and iPads.
While Apple has been cutting back on using Samsung displays, the cut back on processors will be directly hitting one of Samsung's new growth engines. The Samsung partner stated that ''If Samsung fails to win Apple orders for A7 chips, then some of Samsung's system chip-manufacturing lines will be stopped."
Samsung, which sees Apple's decision as a negative, plans to try and maintain their growth momentum by expanding its business with NVIDIA.
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