Report suggests TSMC already producing A8 chips for next iPhone

After months of talk around Apple(s aapl) looking to diversity its list of hardware partners, it appears the talk is turning into action. Taiwan Semiconductor Manufacturing Co (TSMC) is reportedly building new chips for Apple’s next iPhone. AFP reported the news on Wednesday as seen on, citing Commercial Times, which doesn’t always have the best track record on its predictions. However, the news would make some sense based on prior reports of Apple seeking another chip-maker to produce its silicon.

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If the report is accurate it could be a financial blow to Samsung.┬áThe company isn’t just Apple’s biggest rival in mobile devices; it is also a key hardware partner that builds the chips designed by Apple for its iOS devices. That makes for a strained relationship that can only worsen when the two sue each other over mobile patents and phone designs.


Last July, the Wall Street Journal reported a TSMC win for Apple’s chip business with estimates it could eventually earn 30 percent of Apple’s chip business. Because of the long lead times for components, TSMC wouldn’t likely have ramped up in time for the iPhone 5s and iPhone 5c, which were launched just a few months later. If Apple follows its regular update cycle, however, there’s plenty of time for TMSC chips to in new iPhones this fall. And it’s entirely possible that TSMC is simply creating a sample run in advance of what Apple may need for this year’s new iOS models.

Samsung doesn’t break out its revenues for Apple’s chip manufacturing but a bill of materials teardown from iHS estimates a $19 cost for each A7 processor plus M7 co-process in Apple’s iPhone 5s. With tens of millions of iPhones sold, Samsung’s potential revenue rises quickly when it builds the chips for Apple. Now it appears that money may start flowing to TSMC instead.