handshake Samsung and Apple shook hands on 20 percent A6 fee increase

Recently, there was a report floating around suggesting Samsung had instituted a 20 percent fee hike on future A6 processors for Apple out of the blue.  While some of us would love to see Samsung and Apple go blow for blow, the report of the increased A6 price was actually an agreed upon deal between Mr. A and Mr. S, not a blindsided cheap shot by Cupertino's competitor from across the pond.

According to The Street, Apple and Samsung agreed to the increase earlier this year.  Meaning, the 20 percent fee hike was not a low blow aimed at Apple’s precious seeds.  Rather, the two consumer tech-giant grudgingly shook on the deal.

An analyst for Piper Jaffray, Gene Munster, estimated that the increase in A6 prices will only cut Apple’s gross margins by 1-2 percent.  Even so, it’s inevitable that Apple will look for other foundry options in the near future, and all fingers seem to be pointing at Taiwan's TSMC. 

The blood between Apple and Samsung has been boiling for quite some time, but regardless of the unpleasantries Apple still wants the best prices on components for their gadgets.  Continual reliance on Samsung for Apple chips will favor Samsung in the long run in terms of pricings negotiability. 

Word out of Taiwan is that TSMC will begin producing 20nm quad-core chips for Apple by late 2013.  The current-gen Apple A6 chip is based on Samsung’s 32nm process.  Samsung, too, has plans to move their Exynos line to the 20nm (or even 14nm) process, but chances are the South Korean firm won’t be mass producing Apple’s future chip using its factory and fabrication process.

TSMC and Samsung have both invested heavily in the facilities and fabrication technology, but only one will walk away with Apple’s business.