Are Apple Inc. (AAPL) and Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (TSM) Together at Last?

Fast forward a few months, and lo and behold Apple Inc. (NASDAQ:AAPL) had Samsung build all of its A6 processors in the iPhone 5 on the same 32-nanometer process. Test new process out on low-unit product; roll out to high-volume product if things go swimmingly; rinse; repeat.

Wait for it
It’s still possible that Samsung made the smaller chip, but the South Korean conglomerate’s 28-nanometer process reportedly isn’t ready for prime time yet, as it was targeting mass production capabilities by late this year. TMSC still has a lead over Samsung at that node, and is boosting capital expenditures this year to try and keep it that way.

The company has a “near-monopoly” on advanced manufacturing nodes (65-nanometer and below), since many smaller rivals in the contract manufacturing business simply can’t afford to keep up. Samsung is a heavyweight and can afford to keep up, but it’s still slightly behind the times. Needless to say, Intel has deep pockets and unrivaled manufacturing prowess, but has historically shied away from foundry deals.

Since MacRumors crudely uncovered the chip by simply ripping open a new Apple TV, investors still need to await a more thorough analysis to know for sure. However, if this smaller A5 indeed hails from TSMC, that would be a huge supplier shift for Apple Inc. (NASDAQ:AAPL).

The article Are Apple and Taiwan Semiconductor Together at Last? originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple and Intel.

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