Apple and Samsung discuss... CPU production deal

Samsung and Apple may be suing each other left, right and centre, but that hasn't stopped them talking about chip production partnerships.

Yes, Apple and Samsung continue to discuss silicon projects, according to a unnamed source "from an Apple parts supplier based in Korea" cited by the Korea Times.

Local supplier of parts to Apple? Must be Samsung then. Which other local supplier would know?

Samsung currently punches out A5 processors and other choice chippery for Apple, but may be displaced by Taiwanese foundry TSMC when it comes to producing Apple's next mobile CPU, the A6, said to be - but with no real evidence other than likelihood - a quad-core part.

Whatever you think of it as a brand or of its company philosophy, Apple is a shrewd business operation. With a new processor in the works, it will have been talking to Samsung, as its existing supplier, and to potential alternatives, such as TSMC - the world's number one chip foundry, a company that manufacturers silicon for other firms - and, we'd say, UMC, also Taiwanese and the world's number two chip foundry.

Potential contract winners can be played off against each other during negotiations to get the best possible deal, and Apple is good at gaining great terms.

So Apple is not only likely to be still talking to Samsung, but there's mileage from Samsung in suggesting it's not yet out of the picture.

Since it was claimed back in July that TMSC had already started work on the A6 - a process that take six months or more as the supplier strives to ensures its kit is capable of producing the required product at economically viable yields.

If TSMC does indeed have an A6 deal, that doesn't preclude Apple from looking to a second source to ensure it gets the number of chips it needs.

We can say that if Apple expects to include the A6 in the upcoming iPad 3, as some pundits have predicted, it had better get a move on an pick a supplier. If, indeed, it hasn't already. ®