There have been rumours and speculations floating about for a while regarding Apple’s rocky relationship with Intel. However, according to RBC Capital Markets, a possible foundry deal between the two companies is in the pipeline and may be completed soon, given the factors pushing both companies together.
Apple has, for a long time, relied on its arch-competitor and tech giant Samsung for a lot of their components, apart from displays from companies like Sharp and LG, as well as processors. However, given all the legal friction between the two industry titans, it’s become clear that Apple is looking into alternative foundry sources so it can further sever ties with Samsung. Meanwhile, Intel has been a major manufacturer of chips for PCs, a market that is expected to veer off balance soon. It seems more than likely that the two companies would want to develop a symbiotic relationship so Apple can benefit from Intel’s processor expertise and Intel from Apple’s strong position in the mobile industry.
According to Doug Freedman, RBC analyst, Apple is contemplating plans to use Intel to manufacture Apple’s self-designed ARM-based smartphone chips. Apple has invested a great deal into the development of its own ARM architecture, which has been used in the iPhone and iPad. An industry source has mentioned that Intel is unwilling to make any such deals without sufficient incentive. Apple has proposed using Intel’s X86 architecture to run Apple’s next generation devices like the iPad, and considering how rapidly and steeply the demand for Apple’s smartphones and tablets is rising, this could be just the incentive Intel needs to agree to the deal.
One of the top contenders for Apple’s next chip manufacturer is Taiwan Semiconductor Manufacturing Co., a contract chip manufacturer exclusively and solely in the business of producing chips. Some of its clients have, however, had their own irks about the company. Companies like Nvidia have griped about TSMC’s inability to ramp up production quickly. Intel’s foundry department has primarily dealt with manufacturing chips for small semiconductor makers and has been open to accepting bigger, strategically beneficial relationships, of which a relationship with Apple could be one of these. Intel possesses advantages that a company like Apple would find appealing, one of which is its better capacity than alternative foundry sources as well as its manufacturing capability, cited to be generations ahead of companies in the same field.
A relationship between the two could serve to benefit both companies substantially, improving Intel’s expertise in the mobile industry while allowing Apple to reduce its dependence on Samsung. While spokespersons from both companies have refused to confirm or deny the speculations regarding a deal, it seems highly probable it will come to fruition.
