Apple has recently signed a foundry partnership agreement with Taiwan Semiconductor Manufacturing Company (TSMC), industry sources have claimed. Under the terms of the agreement, TSMC will apply its 28nm and 20nm process technologies to produce Apple's next-generation CPUs, according to the sources.

TSMC has responded saying it does not comment on individual clients.

Industry speculation has long been circulated saying that Samsung Electronics would no longer be the exclusive manufacturer of silicon designed for Apple's iOS devices. TSMC was pinpointed as Apple's new potential foundry partner, but many analysts still believe that TSMC is unlikely to land orders from Apple until 2012.

TSMC is believed to have quietly secured Apple's contract, and even succeeded in extending the deal to cover the manufacture for the A6's successor, the sources said.

In addition, the agreed contract quotes are favorable to bring little impact on TSMC's profitability, the sources revealed. TSMC managed to negotiate a good price, allowing gross margins yielded by Apple's orders to be similar to its overall gross margin performance at present, the sources indicated.

TSMC's gross margin for the second quarter of 2011 arrived at 46%.

Apple and TSMC, however, have not yet talked about backend manufacturing, the sources said. It is likely that Apple will have TSMC and the other dedicated packaging and testing house split the orders due to TSMC's limited available capacity for backend services, the sources speculated.

Siliconware Precision Industries (SPIL) and Amkor Technology both have the potential to snatch orders from Apple, the sources said.

Source:digitimes