According to a report filed by EETimes, Apple may partner with the Taiwan Semiconductor Manufacturing Company (TSMC) in a “foundry relationship” to produce the A5 processor for the iPad 2. The move is being billed as a setback to Samsung Electronics, the company currently responsible for the production of Apple’s A4 silicon. “Apple, according to the source, will use TSMC for three reasons: 1. Samsung competes with the iPhone and iPad; 2. TSMC has the highest yielding 40-nm process in the foundry world; and 3. TSMC has the most 40-nm capacity,” writes the Times. The site quotes a report from FBR Capital, which expects iPad production to top 45 million units in 2011; 13 million units in the first half of the year and 32 million units in the second. Neither Apple, Samsung, nor TSMC have publicly commented on the purported foundry deal.

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