Samsung Electronics Co. has reportedly secured a big deal for supplying the main chip to be used in Apple's upcoming iPhone, replacing Taiwan Semiconductor Manufacturing Company (TSMC) as the company's favored chip supplier for its most important products.

Over the last few months, there have been conflicting media reports about whether Samsung or TSMC, the world's biggest chips contract manufacturer, would produce chips for Apple. Prior to the legal disputes between the two companies that began from 2011, Samsung used to manufacture the processors for all the previous iPhones. However, Apple entered into a deal with TSMC in 2013 to produce A8 processors for its iPhone 6 and iPhone 6 Plus devices, in order to diversify its supply chain resources and reduce its dependence on Samsung.

Both TSMC and Samsung have incurred massive capital expenditures to secure orders from Apple and Qualcomm Inc. in the more than $300 billion semiconductor industry. TSMC has invested a record $12 billion in plants and equipment, while Samsung incurred a capital expenditure of $3.7 billion towards its processor business in 2014 and could increase that to $4.9 billion in 2015. Samsung is also investing $15 billion in a new chip plant coming up outside Seoul.

Samsung uses an advanced 14-nanometer manufacturing process to produce smaller chips that consume less energy and provide more processing power, thus outpacing TSMC, which had earlier admitted that it would lose ground to Samsung in the most-advanced chip technology before reclaiming the upper hand in 2016.

Apple's decision to return to Samsung for its chips vindicates the Korean company's decision to make huge investments towards becoming the leader in chip manufacturing technology. Samsung will manufacture Apple A9 processor chips at its Giheung plant in South Korea for the next-generation iPhone and other devices, while additional orders will go to Samsung's partner Globalfoundries. The win comes even as both players are locked in a fierce battle in the smartphones market and iPhone sales continue to increase at the expense of Samsung's own high-end smartphones.