360° Coverage : Apple Buys In-House Processor Chip Company, Will Produce Its Own...

Apple Buys In-House Processor Chip Company, Will Produce Its Own Chips in the Long-Term

Apple to Become In-House Chip Manufacturer

Jul 15 2013, 10:59am CDT | by

Apple Looks to Purchase Chip Manufacturer, Create Its Own in the Future
iPhone 5 components


Apple is known for its acquisition of companies containing various technologies it needs to produce the next-generation iPhones and iPads that its customers will “ooohhhh” and “aaahhh” over for the following year. 


Remember the iPhone 4S? It was one of Apple’s most unforgettable smartphones, particularly because it introduced voice command for Apple in a way that its voice command efforts prior to the Siri company acquisition had not. This past year, Apple acquired the identity security company AuthenTec, and many say that AuthenTec’s fingerprint sensors may go into the iPhone 5S. 


As of now, however, Apple has never been able to produce its own chips. The company has relied on its archenemy, Samsung Electronics, to produce its own iPhone and tablet displays. While Apple has made it known that Apple and Google are competitors in the smartphone and tablet space, it has been subtle with its attempts to move away from Samsung


While Apple takes jabs at Android fragmentation (as did Phil Schiller on Twitter) as well as its slow updates for the majority of Android consumers, Apple has had little to say about Samsung. The Cupertino, California company took Samsung to court last summer, but has not been as vocal about its view of Samsung products as it has Google products. 


Now, facing troubles with current companies with which it contracts for its chips and wanting to free itself completely from the reign of Samsung Electronics, Apple is looking to produce its own iPhone and iPad processor chips in the future. 


According to 9to5Mac, Apple has purchased a company (what many think refers to UMC, United Microelectronics Corporation) that can produce its own chips in-house. This, of course, will allow Apple to produce its own chips within the company without the need to rely on other companies. 


Within the last year, Apple has strategized to remove Samsung from its central position in the manufacturing of Apple tablets and smartphones. The company turned to LG Electronics to come through on iDevice displays, even bailing out LG from some significant debt in order to work with the company. 


Apple still relies on Samsung for its A-series processor chips in iOS devices, but in the long-term, to possess these capabilities in-house will help Cupertino line up with the likes of its “frenemy.” Whatever rivalry between Apple and Samsung exists, it will not become one where Apple and Samsung are on equal footing unless Apple becomes as self-sufficient in smartphone and tablet production as Samsung. 


While Apple hopes to gain its processor chip self-sufficient, production capabilities, it will not gain this ability overnight; in fact, Apple has recently agreed to use TSMC for its chip production in 2014 and, upon not finding any other well-qualified candidates, has agreed to sign a new contract with Samsung to produce its chips once more in 2015 (despite the fact that the current contract with Samsung will end in 2014).


 The tech site SemiAccurate reported a few days ago that Apple “bought into a fab,” code language for owning stock in a processing chip company. CNET later confirmed that the chip-making company in question is GlobalFoundries. According to the CBS-owned tech site (http://news.cnet.com/8301-13579_3-57593589-37/apple-talking-to-globalfoundries-about-u.s.-based-chipmaking-says-report/), 


“Globalfoundries and Samsung have the same technology foundation based on an IBM joint development agreement. So that gives [a possible deal] a little less risk if they’re looking at a secondary option to offset [the current chip manufacturing] with Samsung. Samsung’s fab in Austin (Texas) and GF’s fab in New York could both ramp a similar product and GF could offset capacity that Samsung can’t fulfill.”



<a href="/latest_stories/all/all/22" rel="author">Deidre Richardson</a>
Deidre Richardson is a long-time Apple fan and reports passionate about the latest Apple news and rumors.


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