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TSMC begins making Apple A6 iDevice chips

Samples for now - volume output to follow?

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Taiwanese chip foundry TSMC has started punching out Apple's ARM-based A6 processor.

The manufacturer, which specialises in producing silicon on behalf of so-called 'fabless' chip makers - such as Apple and Nvidia - and is the world's biggest such foundry, is initially producing test chips to verify the Apple's designs and its production line fit together smoothly.

The move, reported by newsagency Reuters, will be seen as an attempt by Apple to further the growing distance between itself and its current chip supplier, Samsung. Apple and Samsung are suing each other for alleged intellectual property infringement.

In fact, Apple's shift to TSMC may be purely pragmatic. Samsung produced Apple's A4 and A5 chips, the latter used in the iPad 2 and expected to be used in the upcoming iPhone 5 aka iPhone 4S. It's not clear how much of the A5 design is Apple and how much was dependent on Samsung expertise.

Apple's need for greater numbers of processors, coupled with its growing in-house chip design expertise, may have steered it from a chip supplier like Samsung to a company like TSMC which simply churns out the chips Apple is now designing itself.

It's a riskier option - Apple has to take greater responsibility for testing its designs and overseeing the production process, rather than simply buy and rebrand an existing, tested design - but potentially much cheaper.

It also allows Apple to bring in other chip factories, such as Taiwan's UMC, the world's second biggets foundry, to ensure it's not limited to a single supplier of such a crucial component.

To be sure of the deal, TSMC now has to show that it can deliver a decent yield of CPUs. Produced in batches on large, circular wafers, not all chips on a given wafer will be any good. Getting the ration of duff parts to working ones - the yield - right is a crucial stage of chipmaking. Chip makers continue to attempt to improve the yield throughout the lifetime of a product.

For that reason, Apple may not yet abandon Samsung. It still needs A5 chips, and will likely do so even once TSMC begins punching out A6s in volume. ®

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