Apple to Keep Samsung as Chip Supplier

Apple is reportedly sticking with Samsung as its primary chipmaker, as the companies put their legal troubles aside.

The Cupertino, Calif.-based company will rely on the South Korean electronics giant to produce its next-generation A6 processor. Analysts said Apple believes Samsung is a “critical business partner,” and isn’t worth losing at a time when the competition in the smartphone market is heating up.

Last year, the lucrative business relationship resulted in the iPhone maker purchasing nearly $8 billion worth of semiconductor chips from Samsung. The legal battle between the two companies began to heat up in court, however, and reports began to surface that the two sides may sever the ties in business.

Apple and Samsung remain entrenched in patent lawsuits in the U.S., Australia, Europe and beyond, regarding their smartphones and tablet computers.

Avoiding the loss of Apple’s business is a big victory for Samsung’s semiconductor business, but the iPhone maker also benefits from maintaining the partnership.

Apple reportedly looked into the possibility of replacing Samsung with another manufacturer like TSMC. However, the company has had success with every version of the iPhone it has produced, and likely wants to change as little as possible about the production process.

Even as Apple’s iPhone 4S and the Samsung Galaxy S2 battle for the title of the top selling smartphone, and the companies continue to battle in court, they each have a large part in the other’s success.

The money Apple’s business provides Samsung is pivotal to the company’s financial situation. Meanwhile, Samsung’s semiconductors are the brain of every single iPhone 4 and 4S being sold today.

Competition always leads to better products, making each individual company stronger, but Samsung and Apple’s symbiotic relationship allows the two tech giants to grab a strangle hold of the smartphone market.

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