Convicted Apple patent infringer Samsung hikes chip fab prices on Apple

“Samsung Electronics, the world’s largest technology firm by revenue, raised the price of mobile processor supplied to Apple Inc. by 20% recently, Chosun Ilbo reported Monday, citing a person familiar with negotiations between the two tech giants,” MarketWatch reports.

“‘Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor,’ the person was quoted as saying in the report. ‘Apple first disapproved it, but finding no replacement supplier, it accepted the (increase),'” MarketWatch reports. “According to the report, Apple buys all APs used for production of iPhone and iPad from Samsung Electronics with the volume estimated to be 130 million units last year and more than 200 million units this year.”

MarketWatch reports, “Samsung Electronics has a long-term contract to supply APs to Apple until 2014, the report added.”

Read more in the full article here.

MacDailyNews Take: Apple put themselves in this sticky supplier situation, so what took Samsung so long and why not hike prices 100%, at least?

Apple could have – and should have – dropped Samsung like a bad habit years ago. Not one red cent should be going from Apple to Samsung today. It’s a travesty. It’s poor planning. And it’s bad business.MacDailyNews Take, June 1, 2012

That said, boycott Samsung-branded products.


          1. yeah.. that …
            as well as all those voter-suppression laws the Repubs forced on the masses ..
            See .. ?
            even your Tea-Bagger friends got bit in the butt on that one !

            ROTFLMAO !

            1. Two. Yes, I know, that’s 21 fewer than Michele Bachman cared for as a foster parent, but I do put my money and time where my mouth is. I realize that’s unsettling to the average Liberal.

            2. u-hhhh .. nope ..
              I don’t think so ..

              A rational person would conclude ..
              that the GOP finally showed the country,
              what they’re REALLY all about ..

              …. irrelevance ..

              And it looks like it will stay that way for
              a long while !

            3. As if 2010 midterms didn’t happen just 24 months ago.

              A refresher:

              The Republican Party gained 63 seats in the U.S. House of Representatives, recapturing the majority, and making it the largest seat change since 1948 and the largest for any midterm election since the 1938 midterm elections. The Republicans gained six seats in the U.S. Senate, expanding its minority, and also gained 680 seats in state legislative races, to break the previous majority record.

              Can’t wait unti 2014, when the typical stupid Dem voter forgets there’s an election or is too busy converting food stamps into cigarettes to vote.

            4. Weekly Standard editor Bill Kristol says that Republicans in Congress should “take Obama’s offer” to raise taxes on the wealthy because the GOP shouldn’t “fall on its sword to defend a bunch of millionaires.”

              During a panel on Fox News Sunday, Kristol predicted that “Republicans will have to give in much more than they think” because of President Barack Obama’s overwhelming electoral defeat of Mitt Romney.

              “Four presidents in the last century have won 50 percent of the vote twice: Roosevelt, Eisenhower, Reagan, and Obama,” the conservative pundit explained. “It pains me to say that, to put him in with those other three, but it’s a fact. Democrats picked up seats in the House and the Senate. The president is in good shape. … I think there will be a big budget deal. It will be an Obama budget deal much more than a Paul Ryan-type budget deal. Elections have consequences.”

            5. Yup. Any Republitard that blames Sandy says that God wanted Obama re-elected. Nevermind that Romney never held a lead in the states that matter, but knowing that would require F2T2 to leave the bubble.

            1. oh!.. brother !
              You’re not really blaming the two storms, and the resulting loss of power on the Libs .. are you ?

              It’s that kind of radical right wing .. horse with blinders thinking which lost you the election !

            2. And those who suffered from Sandy have it better? Dem mayor of N.O. didn’t evacuate. NJ gave evacuation order – saved a lot of lives. Wasn’t Bush’s fault the levees were topped. FEMA has done little but platitudes. Red Cross and National Guard carrying the brunt of work. Many people cold and hungry.

          2. Romney got eaten by his own killer whale, ORCA. Sandy had nothing to do with his loss.

            As the presidential race reached a climax, the Romney campaign had a plan. Campaign volunteers would monitor polling stations in swing states and report back to the headquarters on who had already voted. The Republican Party would use this data to target citizens who had yet to show up to the polls.

            This “strike list” strategy has long been used by both Democrats and Republicans, but the Romney campaign wanted to add a high tech twist: Poll monitors would enter the names via their smartphones, providing the campaign with quicker access to the data. There was even a button for reporting voter fraud or other election problems. They called it Project Orca.

            Orca is another name for killer whale.

            ORCA as experienced by an active Romney campaign volunteer:

            And Romney was supposed to be such a hotshot management consultant. ORCA was pure, unadulterated incompetence – regardless of your political point of view.

            Blaming Sandy is avoiding looking at the Romney campaign’s incompetence.

          3. Glad you’re back. As a a rabid lefty and PATRIOT, I believe this discourse could not continue without your seasoned and well thought out commentary.

            Samsung has every right to price its part any way it want to. It’s called capitalism (which I hear you are in favor of).
            Apple has every right to seek a cheaper supplier. It couldn’t at this time.

            When is the government going to get off poor Apple’s back?
            I hope never.

          4. I knew that you would find an excuse. Why not ask yourself why Romney still needed a boost that late in the election cycle? I am certain that you could easily find five legitimate reasons. I also knew that you would just rejigger your political rhetoric for the next election cycle and pretend as if you had never guaranteed a win and paraded around this forum like a conservative prophet.

            I have to say, though, that when Christie declined to play politics with Hurricane Sandy, it did give a slight boost to Obama. I might vote for Christie in 2016…he earned some respect this year.

      1. OK partisan, we’ve heard your derision, your pathetic hatred, your obvious cries for help. Please go seek out a mental health professional. You have plenty of time to defecate all over this tech forum with your immature proclamations. You have time to get some counseling. Please. Do it for yourself, your family, friends and the others who read MDN for Mac news.

        1. Six days after the re-election of Obama, consequences are already being felt. Dozens of companies have announced layoffs since Tuesday’s election, and the list is expanding rapidly.

          The companies announcing layoffs now include:

          Research in Motion Limited
          Lightyear Network Solutions
          Providence Journal
          Hawker Beechcraft
          CVPH Medical Center
          US Cellular
          Momentive Performance Materials
          Brake Parts
          Vestas Wind Systems
          Center for Hospice New York
          OCE North America
          Darden Restaurants
          United Blood Services Gulf

          These companies alone represent tens of thousands of jobs. Add to this the number of businesses that announced closings on or since Election Day and the number of jobs lost in the last three days is startling.

          Some of the businesses closings announced in the past two days:

          Caterpillar Inc. will close its plant in Owatonna Minn.
          Mount Pleasant’s Albrecht Sentry Foods
          The Target store at Manassas Mall Va.
          Millennium Academy in Wake Forest NC
          Target Closing Kissimmee FL Location
          The Andover Gift Shop in Andover MA
          Grand Union Family Markets Closing Storrs Location CT
          Movie Scene Milford Location NH
          TE Connectivity Closing Greensboro Plant – 620 Layoffs Expected
          Gomer’s Fried Chicken in South Kansas City
          Kmart in Homer Glen
          Fresh Market on Pine Street in Burlington
          AGC Glass North America to permanently close its Blue Ridge Plant in Kingsport Tenn.
          The Target store at Platte and Academy in Colorado Springs
          The Roses store on Reynold Road in Winston-Salem NC
          Meanders Kitchen losing its West Seattle location at 6032 California Ave
          Bost Harley-Davidson at 46th Avenue North and Delaware Ave. in West Nashville TN
          Townsend Booksellers in Oakland
          The Kmart store in Parkway Plaza off University Drive in Durham NC – 79 Jobs Lost

          Today’s additions-so far: Mills Manufacturing NC (68), TECO Coal Corporation (90), Energizer Holdings Inc. (1,500), Exide Technologies in Laureldale (150), Southeastern Container (15), UtahAmerican Energy Inc. (102), The SCA plant in Barton – Plans Staff Reductions, Plexus Corp – Contract Loss = Layoffs, Yakima Regional Medical Center Washington (10+), Crouse Hospital Syracuse NY (70)

          Companies are pointing to two main factors that are leading to the reduction of workers: The economic impact of the Affordable Health Care Act (Obamacare), and the threat of the coming fiscal cliff. Business closings have an immediate and direct impact on the local economy in many ways, and coming just before Thanksgiving and Christmas is hard news for all.

          Updated list of jobs lost since the election:

          These job losses should not come as a surprise, the list of companies that publicly projected reducing workers if Obama were re-elected (meaning Obamacare is more likely to remain as is) is long. Combined with the stock market LOSING ALL GAINS MADE in 2011during the same time span, the early consequences of the election are being felt-the long-term consequences remain to be seen, but there is no question that the nation is off to precarious start. Expect a brutal November jobs report.

          Enjoy your “victory,” America-hating, Liberal fools.

            1. Perhaps because BUB’s quote includes the statement:

              “Companies are pointing to two main factors that are leading to the reduction of workers: The economic impact of the Affordable Health Care Act (Obamacare), and the threat of the coming fiscal cliff.”

              The Republicans were largely responsible for the creation of the fiscal cliff legislation and it would have faced the country regardless of who was elected on Nov. 7.

            2. The list included RIMM.

              As every regular here knows,
              1) RIMM is Canadian
              2) RIMM has been laying off employees all year.

              Draw your own conclusions.

            3. Yeah, that’s a beauty isn’t it? Maybe he want’s a recall? I mean I didn’t vote for Obama but damn, let’s move on. Country is screwed up enough already. But the guy is kind of funny. I’ll bet he watches a lot of Chuck Noris movies. Just saying.

          1. You’re saying that the election should be held hostage to corporations? And if the corporations don’t get what they want then they should punish us? Do us all a favor and look up the definition of Fascism in the dictionary.

          2. Punishing the voters? All the more reason to raise their taxes and support their laid off workers with that money. It’s time these arrogant clowns learned a lesson. They are not royalty. We don’t owe them a fscking thing. Don’t like America, sell your crap somewhere else.

          3. If you are looking at daily or weekly jobs reports to understand the long term direction of the economy, you really need to reassess your thinking. Since about the time of the stimulus, the trend has been in the right direction.

            The fiscal cliff, which both parties entered into because the republicans decided to hold the country hostage, has a lot more to do with it than Obamacare, which companies have had many months to plan for. If they haven’t been able to do it, well, isn’t that the precious “free market” at work? The most competently run businesses can deal with providing benefits to their employees. The ones that can’t will die.

            Also, FYI: analyses from multiple non-partisan organizations forecast better economic outlooks for Obama’s America Hating plan than for Romneys Flag Waving/Apple Pie plan.

            Personally, I love America. Just because you got the flag tatooed on your ass doesn’t mean you love American more than anyone else.

            BTW, let me just put in that the last Republican Pres. set the country back considerably in terms of the economy. Guess he hated America.

          4. “…..Enjoy your “victory,” America-hating, Liberal fools…..”

            Just because Faux News tells you the libs “hate” America …
            doesn’t make it so !

            Your rant suggests that these companies just “decided” to lay off all those people .. “just because”
            the right guy won …

            Seriously, dude … re-examine that argument !

            Oh yeah …

            It was called “Romney-Care” .. way
            before Obama thought it was a good idea .. and the Tea-baggers backed away from it !

            (How soon they forget !)

      2. According to Obama voting math geniuses like 24January1984, Obama has a “mandate” because his machine scrounged up 407,000 more votes than Romney in four U.S. states.

        1. Yeah, and the voting math genius George Bush said he had a mandate with 286 electoral votes to Kerry’s 252. Where does that put Obama? Severe trouncing. And of course, now every Republican is all about getting rid of the Electoral College. Funny how that works.

    1. This report has as “source” just one of many Korean newspapers, not any real insider at Apple or Samsung.

      Also, the conditions for such deals are long term, it is not really possible to all of sudden “hike” the prices.

    1. I agree completely.
      Apple has enough capital to do this . . . perhaps it will take time to do, but if Samsung is capable of fabrication I really don’t know why Apple couldn’t add it.
      Or, Apple needs to advance some cash to other fabricators so they can expand their capabilities faster.

    2. Apple is no longer in the manufacturing business; it develops, designs, markets and supports. Making stuff is a job it leaves for someone else. If Apple is unsatisfied with Samsung, it could theoretically turn to others for processors – Texas Instruments, Taiwan Semiconductor, or IBM, for example.

  1. Dumb MDN take.

    Who else has the capability to supply Apple what they need in the quantity that they need it? Samsung puts out quality chips at a very good price. Why else would Apple buy from them?

    Apple needs to be careful how much they push Samsung. If Samsung was to tell Apple to get lost Apple would have an extremely hard time finding the volume of quality chips that they need.

    Of coarse this may be too complicated for the fanboys to comprehend.

    1. Oh, so Apple being stuck with Samsung today and having to swallow whatever increase Samsung dictates isn’t bad business and poor planning?

      MDN’s Take is pure truth. Just because you can’t handle it, doesn’t make it “dumb.”

      1. According to Greg M, it’s good business and excellent planning to get your company stuck in business with a hostile supplier who can do whatever they want with impunity.

        1. This is what happens when governments refuse to adopt and enforce strict antitrust laws. Have we forgotten that Samsung was found to be fixing DRAM prices? They will do whatever they can get away with to control their segment of the semiconductor market. Do you think that the South Korean government will stop them?

  2. MDN is naive to think that only Samsung would up the price. Any other company would likely to do the same thing. A business usually acts in its own self interest. I doubt any supplier Apple could find has Jesus for a CEO.

  3. I was going to buy Samsung TV (instead of my usual choice, Sony,) but the whole Apple situation made me think twice, I am buying Phillips.
    Another thing, about 18 months ago, we bought 60 24″ Samsung monitors at work. Today, only half are functioning. Really, really bad quality displays.

  4. Apple has a contract with Samsung that runs until 2014. That undoubtedly means both are locked into the deal. Apple is obligated to buy from Samsung and Samsung is obligated to produce for Apple at an agreed upon price. There may be an escalator clause for price increases based on the cost of production, but otherwise it’s undoubtedly an air tight contract. These “sources” may be talking about negotiations for post-2014 production and pricing, which are probably happening now. By then Apple may have other alternatives. Don’t assume stupidity on Apple’s part.

  5. The only problem with Samsung is that they manufacture some excellent products – a few are the best in class for the entire industry. I feel dirty saying that. However, if any company can out-do Samsung it is Apple. Let’s hope they use their billions to free themselves from this poisonous partnership.

  6. Yeah, thanks a lot MDN!
    You deleted the post from Seamus that I replied to (just because he was shouting rude words – you wussies!)

    Now “… almost 2.30” does not have a reference.

    1. I think my tirade of “fuck”s is waaaay less offensive than the barrage of political drivel on this site.

      And “don’t read the comments” or “don’t come here” are not acceptable solutions. I want the news, and I want to read comments about the Apple news… about computers, software, planning, rumors, etc. The acceptable solution is for MDN to delete the drivel… or (it’ll never happen) for the political ravers to act like big boys and go elsewhere for politics.

  7. Can somebody please explain: If there are long term contracts, how can Sumdum raise the prices of mobile processors? I simply don’t understand. What is a long term contract worth then?

  8. I think we should remember that Tim Cook is the master of the supply chain. We should also remember that Apple declared war on Samsung. We should also remember that Apple has enough cash to buy and and all of the manufacturing capability they want. In any war, the outcome of minor skirmishes gives little indication of the likely outcome of the war itself – a good general picks his battles and chooses his timing. By raising their prices, Samsung evidently realise that the Apple relationship is effectively over and are now intent on extracting what value they can before the shutters come down. Building a fabrication plant is a possibility for Apple. Pumping money into TSC is another. My money is on the former – but Cook will be crunching the numbers and looking at projected requirements to determine whether an Apple fab plant, in the US, can be justified. It won’t be an emotional decision, but control of the supply chain will be a major factor.

  9. but finding no replacement supplier, it accepted the (increase)

    IOW: Samsung, having shot themselves in the HEAD once again, discovered that Apple had set up their own chip fab manufacturing center and stopped ordering anything at all from Samsung.

    ‘Samsung’: Korean for rectal pore.

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