Apple and Qualcomm rebuffed in $1bn bids for exclusive TSMC chip supplies

Apple and Qualcomm have been rebuffed in attempts to secure exclusive rights to chip production from Taiwanese Semiconductor Manufacturing Company (TSMC), according to a report from Bloomberg. Both companies offered investments of more than $1 billion in exchange for TSMC dedicating a portion of its production capacity to them, but the company declined the offers in order to retain flexibility in the types of chips it is able to produce.

The bids come as Apple attempts to reduce its dependence on Korean manufacturer Samsung for smartphone and tablet chip production while ring-fencing its long-running patent dispute with the company. Samsung currently manufactures both the A5 chip, which powers the iPad 2 and the iPhone 4S, and the A5X, which powers the third-generation iPad.

Meanwhile, Qualcomm’s lack of capacity for chip production is beginning to limit its earnings. TSMC had previously warned that its 28nm foundry, which produces chips such as Qualcomm’s Snapdragon S4, will fail to meet demand until 2013. Similar supply problems have plagued Nvidia’s 28nm Kepler graphics chip, which is also manufactured by TSMC.