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Apple signs chip manufacturing deal with TSMC in effort to distance itself from Samsung

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iphone close up
iphone close up

The Wall Street Journal reports that Apple has signed a deal with Taiwan Semiconductor Manufacturing Co. to build chips for its mobile devices. TSMC will begin producing chips for Apple starting in 2014, but Apple will continue to rely on Samsung as the primary supplier for its mobile processors through next year. According to the Journal's sources, the transition has been slow-going because of glitches at TSMC that have prevented its output from meeting Apple's power and speed standards.

The transition comes as Apple is trying to rely less and less upon its competitor Samsung as a component supplier. Cupertino has already stopped buying iPhone screens from Samsung and has pulled back on displays for the iPad as well. Back in 2012 reports surfaced that it was looking to distance itself from Samsung when it came to flash memory and RAM chip needs, though at the time it was characterized as Apple simply wanting to diversify its list of suppliers. When it comes to processors, Apple began designing its own chips several generations ago, but it still needs an outside company to manufacture them. Of course, adding fuel to the fire is the fact that both Apple and Samsung have been locked in legal battles over their respective mobile devices for years at this point — while Samsung's line of Galaxy phones have all but taken over the Android ecosystem with record-breaking sales figures.

According to the Journal, Apple and TSMC discussed working together as early as 2010. In 2011, the companies reportedly got closer to an agreement, but TSMC balked because Apple had requested that it either be allowed to invest in TSMC, or that the manufacturer devote factory floor space specifically to Apple. It's not clear what kind of yield TSMC will be able to offer Apple under the new deal, or how quickly Cupertino will be able to shift away from relying on Samsung's manufacturing business.