Apple-Samsung phone battle , court in August

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Apple has signed a deal with a new chip manufacturer which could see its troubled relationship with Samsung finally brought to an end. Cupertino has reportedly inked an agreement with the Taiwan Semiconductor Manufacturing Company (TSMC) which will eventually see it take over full production of mobile processors for all iOS gizmos. This information has published by court.

Currently, Apple is stuck in an unhappy marriage with Samsung, which is still the fruity firm's main chip supplier. The pair have been at each other's throats since 2011, fighting an interminable series of patent infringement legal battles in courts around the world. The tit-for-tat lawsuits hinged upon squabbles over key parts of the firms' smartphone software and hardware.

Recently A court's decision not to prevent multiple Samsung handsets from being sold in the U.S. despite their being found to infringe Apple patents will go before an appeal's court in early August.The Court of Appeals for the Federal Circuit in Washington, D.C., said Monday it will hear 15 minutes of oral arguments in the case from Samsung and Apple attorneys on August 9.

The hearing comes almost a year after a jury at the U.S. District Court for the Northern District of California in San Jose rejected arguments from Samsung and found that the company willfully set out to copy elements of Apple's iPhone when designing hardware and software for 26 of its phones and tablets.

The case, which saw Apple awarded more than $1 billion in damages, captivated the technology industry, and the appeals process is expected to be equally closely watched.

Following the case, Judge Lucy Koh considered the issue of a sales ban on the infringing Samsung products and in December ruled a ban wasn't warranted."To the limited extent that Apple has been able to show that any of its harms were caused by Samsung's illegal conduct (in this case, only trade dress dilution), Apple has not established that the equities support an injunction," she wrote in late December. Apple quickly appealed the decision and that's what's set to be heard in Washington in August. Whatever the decision, the effect on the market is expected to be limited as many of the phones are older and no longer being sold.

Since the December decision, Apple has also seen the amount of damages awarded to it reduced. Judge Koh struck about $450 million off of Apple's award, saying the jury had used a flawed method to come up with the award. She also ordered a partial retrial to determine the correct damages.

TAIPEI: Apple has struck a deal with the world's biggest contract microchip maker in what analysts see as an attempt to reduce its reliance on arch-rival Samsung, a report said. The US tech giant forged the agreement with Taiwan Semiconductor Manufacturing Co (TSMC) earlier this month, according to the Wall Street Journal, which cited unidentified TSMC executives. It said manufacturing of the chips, to be used in Apple mobile devices, would start early next year. 

The Journal said the move is the latest in a series of efforts by Apple to lessen its reliance on parts produced by South Korea's Samsung. But despite the deal with TSMC, Samsung will remain Apple's main supplier of high-resolution screens, memory chips and processors used in mobile devices through next year, the Journal said. 

Apple and TSMC have reportedly been in discussions since 2010, but haven't been able to sign on the dotted line because TSMC reportedly refused requests by Apple to invest in the firm, or to dedicate a facility to producing Apple components. Cupertino-watchers claim that Apple has been trying to arrange a divorce from Samsung for some time. However, like all break-ups, nothing's happening straight away and it looks as if Samsung will be making Apple's chips for at least a year to come.

Credit Suisse analyst Randy Abrams claimed Apple would account for about 8 per cent of TSMC's total revenue. Cupertino would be an "important new leading-edge" customer, he said. This could rise to 15 percent in 2015, Abrams continued.

So what of the spurned partner Samsung? Well, aside from continuing a patent-infringement battle against its former ally, the South Korean firm will probably begin bashing out chips for other companies, while still giving Apple DRAM and NAND chips for its iOS devices – at least in the short term.

Its margins are thought to be lower on processor chips than on memory chips. This margin will be even tighter when Apple stops buying processors, meaning Samsung will be on the look out for new customers.

TSMC is the world's largest manufacturer of chips, if taken by revenue, and is based in Taiwan, which is prone to earthquakes and theoretically vulnerable to a physical Chinese attack, as Beijing still counts Taiwan as a rogue breakaway state. However, it already operates plants in Singapore and Shanghai, as well as Washington state.

TSMC spokeswoman Elizabeth Sun declined to comment when approached by AFP. "In line with the company's established policy, we will not comment on individual clients," she said. Analysts see the deal as part of Apple's bid to diversify its supply chains and distance itself from Samsung, its main competitor in the mobile phone market. "It is inevitable that Apple must move to reduce its reliance on Samsung while their legal lawsuits over patents flare," an analyst at a foreign firm in Taipei told AFP, declining to be named. Samsung won a round in its long-running patents battle with Apple in early June when a US trade panel banned the import and sale of some older models of the iPhone and iPad. In a separate patent fight in US federal court, Samsung was ordered last August to pay more than $1 billion for patent infringement. A judge later slashed the award to $598.9 million. By diversifying its supply chains, Apple could also cut its costs, Kuo Ming-chi, analyst at the Taipei-based KGI Securities Investment Advisory Co, told AFP. "This is crucial as Apple's profit margin fell to around 37% in the first quarter, down from a peak of around 45%." Kuo said the diversification policy was also reflected in Apple's movement of some of its assembly orders away from Taiwanese manufacturing conglomerate Hon Hai, also known as Foxconn. Hon Hai employs about one million workers in China, roughly half of them based in its main facility in Shenzhen bordering Hong Kong. Apple and TSMC started discussing working together to build chips as early as 2010, according to the Journal report. Apple asked either to invest in TSMC, or to have TSMC set aside factory space dedicated to Apple chips, it said. But both requests were rejected as the Taiwanese company wanted to maintain its independence and manufacturing flexibility, the Journal said.

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