Last week, The Strategic Sourceror Blog reported what we at Supply Chain Matters have long suspected, that Apple is in the process of making a major change in its strategic component sourcing strategy. The Sourceror commentary makes note that recent reports published in the Taiwan Commercial Times point to Apple considering global semiconductor fab provider Taiwan Semiconductor Manufacturing (TSMC) as a new supplier for the A6X microprocessor utilized in some Apple iPad products. If this report proves to be accurate, TSMC will take over supply of this component from existing supplier Samsung Electronics.

In our Supply Chain Matters commentary published In late August 2012, we noted that in the light of the contentious patent infringement court battles among Apple and Samsung, that there may well be strategic supply contract implications. In that commentary, we speculated on whether Apple would gradually replace Samsung as a major supplier for its key ARM microprocessor chips that power iPhones and iPads. We noted that few suppliers could scale to the volume and cost delivery targets of Apple, and thus, any transition of strategic sourcing would gradually occur. The next major turning point would most likely be when certain Samsung multi-year strategic supply agreements reach renewal point.

Again, if these reports are indeed accurate, it would indicate that Apple is indeed moving in the direction of supplementing or perhaps replacing over the long-term, its strategic suppliers of ARM and other microprocessors.  The next move to watch for will be confirmation from Apple and TSMC, as well as other announcements from Samsung relative to new supplier agreements with other high tech and consumer electronics providers.

Bob Ferrari