TSMC will produce A-Series Chips for Apple.

According to Wall Street Journal, Taiwan Semiconductor Manufacturing (TSMC) has agreed to supply Apple with A-series chips. Although the matter has been discussed since 2010, the deal was only signed this month, and TSMC starts producing some of the chips in 2014. By that time, the Taiwan company will improve the quality of the products so that they meet Apple’s requirements. The chips will become smaller and more energy efficient by using 20-nanometre technology.

When negotiating the deal, the American company offered either to invest in TSMC or to assign one factory as an exclusive Apple supplier. However, the Taiwan company did not accept either of the options to keep TSMC independent and adaptable.

Samsung used to be Apple’s main A-series chips supplier, but present ferocious competition between the companies is forcing the latter to diminish its dependence on the Korean company.

The history of the relationship between the two companies started when Samsung became a supplier of iPod processors, instead of PortalPlayer. Apple expected its partner to enter mobile device market, but Samsung assured the American company that the components would be produced separately and no information would be shared between the departments.

However, Apple was not happy about the agreement, so in 2008 it tried to find another producer of flash memory. Two years later the production of iPhone displays was moved to Sharp and Toshiba, although Samsung still supplied iPad Retina displays.

Naturally, collaboration with Apple is extremely profitable for Samsung, as 16% of the total figure of component sales comes from the Cupertino company. So, Samsung will try to keep Apple as a customer despite the latter’s desire of switching to other suppliers.