Apple is reported to have inked a deal with Taiwanese chip manufacturer TSMC to produce the A5 dual-core chip for the iPad 2, in a substantial blow to former producer Samsung.
TSMC was apparently chosen over Samsung because tests showed it was consistently producing the chips more efficiently at 40 nanometers than was Samsung at 45 nanometers. It had the most capacity and highest yields in each batch. There are now suggestions that the deal between Apple and TSMC could stretch into the future, with the Taiwanese company producing the next generation of 28 nanometer quad-core chips.
Samsung made the A4 chip in the original iPad along with the processor for the iPhone, but as a competitor producing the Galaxy S and Galaxy Tab, it's probably in Apple's interests to move away from Samsung if Apple feared the company would give production priority to its own devices in the future.
Apple still depends on Samsung for the majority of the flash memory it uses in iPads, iPhones and iPods, but it has switched manufacturing partners in the past when it sees a commercial or technological advantage.