In 2013, Samsung was riding high. With Galaxy phone sales on the rise, profits in its handset division were pacing Apple. Other hardware makers were in the red. Apple was facing a tough reassessment from Wall Street with the release of the iPhone 5s and 5c. With only a moderate launch of these devices, growth slowed and gross margins slipped. Many saw the innovator dressing old hardware in new cases.

What a difference a year can make.

The competition between Samsung and Apple continues to simmer while the hardware manufacturing competition begins a new phase. Apple has just received its first batch of microprocessors from Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s biggest chip maker by revenue. This is the first time Apple has used TSMC, as the iPhone maker looks to diversify its overseas suppliers.

Prior to the TSMC deal, Samsung was the exclusive supplier of Apple’s microprocessors from the very first iPhone launched in 2007. In addition to microprocessors, Samsung also supplied the displays and memory chips for iPhones and iPads for many years. That was until 2011, when Apple sued Samsung in court for infringing the company’s patents and intellectual properties for its smartphone and tablets. Since then, Apple has reduced its dependence on Samsung by striking deals with other display and chip makers around Asia.

TSMC has supplanted Samsung Electronics as Apple’s chief chip maker for iPhones and iPads. Apple will continue to rely on the Korean electronics giant for microprocessors, but the rivalry between Apple and Samsung will only heat up as demand rises in the mobile and wearable arenas. The deal with TSMC allows Apple to be less reliant on Samsung, while able to leverage better prices on future chip purchases.

Samsung has already been feeling the effects of this slowdown in sales. Apple is reportedly going to increase its orders from TSMC. But while it’s not clear how many microprocessors TSMC has shipped to Apple, the chip maker has begun manufacturing Apple’s application processors, with its advanced 20-nanometer manufacturing technology, which makes the chips faster and less power hungry. Both Apple and Samsung are also testing next-generation microprocessors with an even more advanced 16-nanometer process that will be used in “large scale” next year.