Apple Inc. (AAPL) Readying Next Generation iPhone Chip [REPORT]

Apple Inc. (NASDAQ:AAPL) and their manufacturer are preparing for the next generation chip that will land in upcoming iPhone 5S and iPad 5.

The Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) is predicted to tape out in the final stage of manufacturing. The A7 chip will be set for pilot stage sometime during the summer and the commercial production will start in 2014.

The chip will feature the 20-nanometer manufacturing process, which isn’t set out to come until 2014. It’s reported that Apple will continue to use products based on the Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM)’s 2-nanometer design.

This report is just another big move for Apple Inc. (NASDAQ:AAPL). For years, Samsung was the exclusive manufacturer of Apple’s processors including the most current A6 chips. It’ s apparent Apple wants to cut ties from Samsung, their biggest rival in technology.

According to Digitimes, “TSMC is expanding production facilities at 14-fab at the Tainan Science Park with a total investment at the park of NT$500 billion ($16.87 billion), said the sources, adding that TSMC will utilize 14-fab to manufacture the A7 chips for Apple.”

Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) has yet to make an official comment regarding the matter.

This isn’t the first time Apple Inc. (NASDAQ:AAPL) has made changes to their products and services in order to cut ties with competition. Last summer, the company attempted to launch their own maps application, which unfortunately was far less successful than initially hoped. Google Inc (NASDAQ:GOOG) had to create new Google Maps applications for the iPhone 5 because Apple initially didn’t allow the new iPhone to feature the maps.

The upcoming iPhone 5S is expected to debut sometime this year, most likely somewhere between the middle and the end of the year. There were rumors that the next iPhone could debut as early as June but more recent reports indicate it could arrive sometime in August.