Updates to this story
Dan Heyler, a semiconductor analyst with Merrill Lynch in Taipei, told the China-based Commercial Times newspaper over the weekend TSMC will most likely be producing "A6" processors for Apple, a next-generation ARM-based design, in 2012.
Ars Technica has quoted "numerous sources" inside the semiconductor industry to back this up. Basically it seels that Apple is not going to allow Samsung to build its next-generation ARM SoCs. This is called by the uninspiring name "A6" which is a road that goes from Luton to Carlisle and thus starts from nowhere, twists and turns before ending up in a place even less interesting.
Apparently Apple's chum Taiwan Semiconductor Manufacturing Company is throwing its self off a roof to get the contract from its rival. Rumours have been abounding that the pair were seen cuddling up in early 2011.
The dark satanic rumour mill suggested that Jobs' Mob has been working with TSMC to move its mobile processors to the foundry's 28nm process. However we started to question these rumours when Samsung, which produced the A4 processors for Apple continued to belt out the A5. After all it made no sense for Apple to do all that cuddling and still give the contract to Samsung.
Soon after Apple suddenly got paranoid about Samsung's Android plans and unleashed its legal pit-bulls, claiming that Samsung for allegedly copying the look and design of Apple's iPhone and iPad for its Galaxy S smartphones and Galaxy Tab tablets.
This still strikes us as a strange decision as Apple was still negotiating component contracts from Samsung a year ago and remains having to buy them from the company it claims steals its ideas. A year ago Apple knew that the Galaxy S and Tab were coming out, so it must have known that it was going to pick a fight with Samsung. If the rumours were correct, then it already had a deal with TSMC waiting in the wings. So why didn't it press ahead then?
Our own theory is that Apple has been wanting to dump Samsung for ages, but comparatively recently made a policy decision to aggressively take down Android using the tried and tested IP law method. This means that Android suppliers would be forced to pay Apple for licences and thus Jobs Mob would make money even if its rivals were more successful. In Apple's mind, sinking Android trumped than any hardware supplier plans.
As far as Apple is concerned it is a win-win situation. TSMC uses a 40nm process, while Samsung uses 45 nm. If the earlier rumours are right, and Apple has been working with TSMC to move to a 28nm process, it could give Apple a competitive advantage.
The only other candidate for Apple to work with is Chipzilla but this would be a long way away yet. That would require either the use of a new chip from Intel, or a way of mix and matching Apple's low-power ARM designs with Intel's new 22nm three-dimensional transistor process.
That will take some time, so it means that TSMC would likely be the best stopgap.