• Reuters, Friday, July 15, 2011 11:23 AM

Taiwan's TSMC has begun trial manufacturing of next generation chips for Apple Inc's mobile devices, a sign that the iPad maker is shifting from its traditional chip supplier, Samsung Electronics. Samsung and Apple are in a legal dispute over patents, and Samsung has emerged as Apple's toughest competitor in the smartphone and tablet market.

TSMC is an obvious candidate to win processor business from Apple as it has budgeted $7.8 billion this year to update technology and add capacity. It also has experience with the architecture of British chip designer ARM Holdings Plc, widely used by Apple to make power-efficient mobile chips.

The tablet market, created only last year with Apple's iPad, is expected to surge to 108 million devices next year from an estimated 70 million in 2011 and just 17.6 million in 2010, according to Gartner.

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