Apple application processors - what are the options Our joint view In recent days, press reports (Commercial Times etc) have animated the debate on how Apple may change its strategy for application processors. Post channel checks, we are of the view that changes are non existent near term but could step up longer term. Current generation (A5): no major changes Our checks confirm that Samsung LSI co-designed and currently manufactures (45nm) the Apple A5 processor used in the iPad 2, likely to continue for the iPhone 5. However, Samsung LSI is potentially capacity-constrained if its own smartphone business continues to do well - hence also multi-sourcing on that side (Nvidia). This could lead Apple to introduce a second source - although we have no indications of this as of now. Next generation: Some TSMC activity For 2012 devices, our checks indicate that TSMC has sampled for Apple. It is also possible that Apple/PA Semis takes on over time the full design, which makes the question of manufacturing separate. This could also correspond to the 28nm process juncture for High K metal gates - where full re-design is required to move from one process to another. Over time this makes TSMC’s involvement possible, keeping in mind design/process implementation lead times.