Samsung looks to diversify chip business amid Apple trouble

(Credit: Scott Stein/CNET)

Samsung is already responding to Apple's seeming desire to reduce its reliance on its chief competitor for the production of mobile processors.

Stephen Woo, president of Samsung's Systems LSI division, which is charged with producing mobile processors, told Reuters in an interview published yesterday that his company is looking to "diversify our customer base." To do so, he said, Samsung has already added "some Chinese customers."

Woo admitted that the move is a response to Apple's waning reliance upon Samsung for its chip-making needs. Apple pays Samsung about $8.8 billion for its mobile processors, representing about 80 percent of Samsung's business, according to data from Goldman Sachs. In the coming years, however, Apple is expected to go elsewhere with its business, and by 2017, reduce its orders to Samsung by 80 percent.

That transition is reportedly already in the works. Earlier this month, Taiwan-based Commercial Times reported that Apple had agreed to initiate trial production with Taiwan Semiconductor of the A6X processor found in its fourth-generation iPad. If all goes well, Taiwan Semiconductor could receive the entire A6X order.

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