Apple, Intel Collaboration Unlikely To Happen Soon

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A report yesterday indicated that Apple Inc. (NASDAQ:AAPL) and Intel Corporation (NASDAQ:INTC) were in talks since last year to form a strategic partnership regarding the manufacturing of ARM-based SoCs based chips for the iOS device.

Apple, Intel Collaboration Unlikely To Happen Soon

Some analysts believe that the partnership is unlikely to happen anytime soon. Linley Gwennap, analyst at The Linley Group doubted Intel Corporation (NASDAQ:INTC)’s readiness to manufacture the chips for the iPhone and iPad maker. In an e-mail response to CNET regarding the issue, Linley said, “I laugh when I see statements like, Intel has to decide whether it should supply to Apple. That’s like saying; I need to decide whether I should date Kate Upton.”

According to him, there is no doubt that Intel Corporation (NASDAQ:INTC) has the manufacturing process technology to manufacture chips for Apple Inc. (NASDAQ:AAPL). However, he cited that he is not sure whether the company has the IP library to support a complex system on a chip like the A6 and perhaps the A7.

Nathan Brookwood, chip guru of Insight 64 also believes that Intel will not be ready to manufacture chips for Apple anytime soon. He thinks that the partnership could happen at least two years from now. According to him, at present, Intel doesn’t have the system-on-a chip-tech that would entice Apple.

He also feels that it is beneficial for Apple Inc. (NASDAQ:AAPL) to move away from Samsung. He said, “The Samsung semiconductor guys are privy to the product plans of customers (like Apple), and if Samsung Semiconductor knows, there’s a possibility that Samsung Electronics is going to find out too.”

At present, Samsung Electronics Co Ltd (LON:BC94) has an agreement with Apple Inc. (NASDAQ:AAPL) to supply mobile processors such as the A6 CPU for the iPhone 5 and the A6X integrated in the iPad 4.  The South Korean electronics manufacturer has a factory in Austin, Texas to produce processors for the iPhone and the iPad. The company is doing great job in delivering the supplies consistently despite its legal battle against Apple.

The report from CNET also cited Taiwan Semiconductor Manufacturing Company (TSMC) is another hindrance in the Intel-Apple partnership. A source in the chip industry said that Apple is designing products based on the 20-nanometer process technology of TSMC, and its production is expected to start in 2014. According to the source, Samsung will continue to handle the production of the 28 and 32- nanometer for Apple, while TSMC will handle the manufacturing of the more advanced 20-nanometer generation.

The source noted that the proposed transition with TSMC had been in the process for some time, and switching from one processor manufacturer to another is a slow process. He said the transition occurs in stages and it takes years to complete.

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