Apple’s New Chip Catalyst

Apple storeFighting dirty has become part and parcel of competing in the tech industry, and in the tech industry today, there’s no competitor as downright frightening as Apple (NASDAQ:AAPL). King of the mountain, Apple wields a heavy sword — just ask Samsung (SSNLF.PK), which has borne more than its share of Apple’s attacks.

This time, the Cupertino-based tech giant isn’t using brute force, though. Instead Apple has used its finesse to lure away former AMD chief engineer and U.S.-based Samsung chip designer Jim Mergard. His expertise on desktop system processors and SoC (systems on a chip) makes him a valuable asset in a major area of competition between the two companies: original chip design.

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Both Apple and Samsung are increasingly relying on their own in-house designed chips, though they each use ARM (NASDAQ:ARMH) technology as a foundation for their work. The chips are used in mobile devices like Apple’s iPhone and iPad and Samsung’s Galaxy smartphone and tablet.

It’s not yet known what Mergard’s role at Apple will be, nor whether he’ll have to leave the Austin, Texas, area where he is currently based, reports the Wall Street Journal. In another example of the extreme competitiveness between these two companies, which still do business together, Apple recently expanded its facilities and gathered some of its chip designers into Austin, where Samsung had already set up a facility to manufacture chips for Apple.

Apple’s new Austin facility is working on the next generation of its Ax chip series. Apple uses the custom-designed chips in its smartphones and tablets, the main area in which it competes with Samsung, and in which the two companies are engaged in multi-national litigation over patent infringements.

Mergard is described as being a leading chip expert, which means he could potentially help Apple design its own chips for desktop and notebook systems as well as mobile devices, thus allowing the company to sever its ties with Intel (NASDAQ:INTC) as well as Samsung. Custom-designed chips would also provide Apple with a better, more targeted performance than that of standard chips.

Apple’s self-designed dual-core A6 chip, which powers the new iPhone 5,  has been widely praised for its speed and battery efficiency. Mergard could help the company with similar endeavors, helping to further differentiate Apple’s products from the herd.

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