Samsung about to lose Apple's chip contract -

Samsung is about to lose its contract selling chips to Apple and while this is not unexpected, the word on the street is that the work is about to be picked up by Intel.

Intel, which has been slower than an asthmatic ant with a heavy load of shopping to enter the mobile market, is not exactly anyone's first guess to work with Apple. Cupertino, against all logic, is seen as the technology leader in the smartphone world. Intel is still playing catch-up.

Indeed, Apple had been expected to come up with chips of its own, having had a crack at adapting ARM chips.

It does not seem that Apple is interested in Intel's offerings yet. According to Extreme Tech, Apple  wants Intel to manufacture its own ARM based chips at Intel foundries.

After all, Intel had announced that it was moving into the foundry business and there were factories all ready. But an analyst at RBC Capital, Doug Freedman, said that the use of Intel's fab business is not all that is on the table.

Apple has apparently agreed to transition its iPads away from ARM to an Intel x86 system on a chip. In return it would make Apple's ARM SoCs which are found in the iPhone.

The talks for the deal are still in their early stages. It is not as daft as it sounds, particularly when you take into account rumours that Intel is looking to create lower powered SoCs by next year.

Apple is able to get its chips away from Samsung, but it will also get to shift its iPads away from smartphone chips to something more meaty. True, Intel's chips are not there yet, particularly when it comes to power drains. But it would give Apple an answer to Microsoft's Surface and other tablets which are geared for the professional market.

Apple has few choices when it comes to making its SoCs. It needs to make 100 million chips per year and with Samsung out of the picture that only leaves TSMC, GlobalFoundries, and Intel.

TSMC was the logical choice, but it is flat out producing chips for Qualcomm, Nvidia, and AMD. GlobalFoundries is a possibility, but Apple would have to make sure the company had enough capacity at an advanced process node.

Intel has its 3D FinFET 22nm process and is getting the hang of making chips for Achronix and Tabula. The question is then if Intel could scale up its production. Achronix or Tabula are tens of thousands of chips but Apple wants hundreds of millions.

Moving away from Samsung will take Apple a long time, and it will have the power to shape Intel's process. If Intel plays ball it could be worth $2 billion per year.