Apple (AAPL) to Outsource the Bulk of its Application Processors to Samsung

According to a recent report from The Korean Times, it has been revealed that Apple Inc. (AAPL) has agreed to outsource the bulk of its application processors (APs) for iPhones and iPads starting in 2015 to Samsung Electronics.

The newspaper notes that the agreement will cause Samsung to become a primary supplier of APs to Cupertino, pushing Taiwan Semi into second place. Furthermore, Apple will design its A-series APs, and Samsung will fabricate them in partnership with GlobalFoundries, a semiconductor manufacturer based in Santa Clara, California.

“Apple has designated Samsung as the primary supplier of its next A-series chips powering iOS devices from 2016 as the alliance with GlobalFoundries enabled Samsung to cut off capacity risk,” a source familiar with the agreement told the publication.

The value of the deal is said to be worth “billions of dollars”, according to the daily.

The resumption of business between Apple and Samsung comes a month after the two companies decided to drop all the lawsuits against each other outside of the United States.

In other Apple news, analysts at equity firm BTIG Research raised this morning their APPL 12 month case base estimate to $135 from $128 citing higher estimates. BTIG lifted their 2015 EPS growth expectation by 3% to 20%.

The firm’s new price objective suggests a potential upside of 18.26% from ticker’s current pps.

Shares of Apple are trading up $0.16 to $114.15 in pre-market trading.

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