“In the past year, Apple executives have expressed concern that their dependence on Samsung limits Apple’s ability to control its destiny by constricting Apple’s negotiating power and ability to use different technologies, according to people who have been told so by Apple executives,” Jessica E. Lessin, Lorraine Luk and Juro Osawa report for The Wall Street Journal. “Apple has cut back on some purchases. It no longer buys iPhone screens from Samsung and has reduced iPad-screen purchases, suppliers say. And Apple has been buying more flash-memory chips—an essential component for storing data—from other makers, say former Apple executives and officials at another chip supplier.”
“But Apple remains critically dependent on Samsung. The microprocessor brains that control iPods, iPhones and iPads are Samsung-built. And some new iPads still use Samsung screens, according to examinations of the devices by industry analysts,” Lessin, Luk and Osawa report. “Apple’s deal this month to start buying chips from TSMC is a milestone. Apple long wanted to build its own processors, and it bought a chip company in 2008 to begin designing the chips itself. But it continued to rely on Samsung to make them. As early as 2010, Apple and TSMC started discussing working together to build the chips, say the TSMC executives. In 2011, TSMC senior executive Chiang Shang-yi met Apple officials to discuss collaborating on the complex process.”
“Samsung has reason to keep the Apple relationship alive. Apple is still Samsung’s biggest customer for components, and a complete retreat by Apple from Samsung would hurt Samsung’s earnings, analysts say,” Lessin, Luk and Osawa report. “Apple’s component orders from Samsung were set to hit around $10 billion last year, says Mark Newman, an analyst at Sanford Bernstein in Hong Kong. That represents a significant chunk of the 67.89 trillion won ($59.13 billion) Samsung posted in sales from its component business, which includes chips and displays. The Apple processor, where Samsung is currently the sole supplier, accounted for $5 billion of purchases in 2012, he estimates. ‘If Samsung loses Apple as a client, it will have an impact because Apple represents a large portion’ of Samsung’s sales of non-memory chips, he says.”
Read more in the full article here.
MacDailyNews Take: Maybe the slavish copier can make up the lost billions in vacuum cleaner sales?
Smirk.
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‘Breakthrough Apple product’ looming? Imagination Technologies and TSMC strengthen technology collaboration – March 25, 2013
TSMC CEO comments signal massive next-gen Apple A-series chip orders – January 19, 2013
People should know that chip operation only represent an extreme small portion of the whole Samsung Empire… Even Apple cease to order anything from Samsung, it will not hurt Samsung that much… unfortunately.
What does “the Samsung Empire” have to,do with anything? You should know that facilities that produce chips are not the same ones that produce vacuum cleaners. If Samsung can’t keep its chip factories supplied with orders then . . . Well? Samsung can’t keep its chip factories supplied with orders. If Samsung has to shut down computer facilities the stock market will react.
In South Korea, Samsung own almost every sector from Defense weaponry to rice cooker. It’s influence on South Korea’s political landscape is undeniable.
my 2 cents…
It is possible, in Korea, to live a 100% Samsung life. They even make houses.
If I read the article correctly apple component orders from Samsung was $10 billion. Not sure how much from chips, but what would be biggest part of that? Samsung losing $10 billion is nearly 13 percent of their income. That is huge….
“The Apple processor, where Samsung is currently the sole supplier, accounted for $5 billion of purchases in 2012”
“it will not hurt Samsung that much ”
You are wrong. The point of getting into the handset business was to EXPAND Samsung’s business and profits. Losing $10 Billion per year, at the same time that Apple just raised the performance bar and Samsung is being attacked (successfully) by Chinese makers, will cost Samsung more than they profited last year on total handset sales.
What ironic, is that Samsung has positioned itself to abandon Android, while Chinese makers are using something else entirely. The really big loser is Google.
Its ok for Google if Android will die. Its a fail OS… they never earn on that OS. It will hurt more if iOS will die.
It will hurt gaggle 12.5 B after buying Moto.
I Would never buy even a stick of gum from these ass holes let alone a vacuum!
I’m in the market for a new washer and dryer, and was seriously considering Samsung, until their copying of Apple’s iPhone turned me off. Now LG is my current choice. When my Samsung TVs die down the road I’ll replace them with another manufacture’s products.
LG (“Lucky Golden” . . From their full name, “Lucky Golden Dragon”) makes high quality products.
Actually the name was Lucky-Goldstar. Lucky Golden Dragon sounds more fun though.
https://en.wikipedia.org/wiki/LG_Corp
We sent back a LG washer and dryer. The washer in spin nearly spun through the floor. Videos of them flying apart on You tube. We bought good old Speed Queen from Wisconsin.
Speed Queen washers and dryers are built like tanks! Just go to any laundromat and see what they use.
LG make complete rubbish. LG is the old Goldstar (which made very mediocre stuff), rebranded and with masses of marketing dollars thrown at it. LG is a triumph of marketing over manufacturing substance. But I’m with you on Samsung, I’ll never buy a Samsung product, ever. Pay for quality – Miele, Bosch, Asko, etc.
I agree. I have an LG washer and dryer, and an LG fridge. The washer and dryer have been OK (not great but minimal issues) but the fridge has blown a fuse (which luckily I figured out and fixed myself or that would have cost a bunch), doesn’t make ice for shit and leaks water down the back of the ice holder, freezer door pops open when you close the fridge door and sometimes doesn’t close back all the way. Construction is very flimsy with several plastic pieces breaking very easily. I won’t by another LG anything.
In business it s all about TRUST, Samsung betrayed Apple.
Samsung: You get what you give. Watch your back. 😯
The other benefit Samsung gets from providing parts to Apple is an advanced look at upcoming products as well as Apple’s expected sales volumes. Valuable information for a competitor.
“‘WAS’ an advanced look at upcoming products”…
Hope all the money they sunk into their “Store Within a Store” displays in BestBuys drains them dry slowly as well…
HTC was also recently complaining about Samsung. I see no one rushing to use any Samsung products if they could possibly help it. It’s not just Apple, every phone manufacturer will try and distance themselves from Samsung.
Samsung is going to be facing a backlash like it wouldn’t believe. They may have the marketing muscle at the moment, but it will not last long. They screwed the pooch.
1. d4 Nf6
2. c4 e6
3. Nf3 b6
4. g3 Bb7
5. Bg2 Be7
6. Nc3 O-O
7. O-O d5
8. Ne5 c6
9. cxd5?! cxd5
10. Bf4 a6
11. Rc1 b5
12. Qb3 Nc6
13. Nxc6 Bxc6
14. h3? Qd7
15. Kh2 Nh5
16. Bd2 f5!
17. Qd1 b4!
18. Nb1 Bb5
19. Rg1 Bd6
20. e4 fxe4! (say goodnight, Samsung.)
21. Qxh5 Rxf2
22. Qg5 Raf8
23. Kh1 R8f5
24. Qe3 Bd3
25. Rce1 h6!!
ain’t it the truth?
I really don’t understand you this time.
I gave up after the first line, full marks o effort mind. As for Samsung I bet thoes vacumn cleaners are just copies of Dysons.
just an analogy for my own amusement: the notation from The Immortal Game, my point being that white (Samsung) is driving its offense against the more strategic black (Apple) who holds the position at 20. e4 fxe4! … there is no substitute for creativity.
In the future, I’ll keep my abstract chess metaphors to myself.
Don’t you dare! 🙁
A salute to you, sir!
Samsung people like most asian do not play chess , they play the go game and they use the same type of strategies in the business world . Nothing we can do except learning it and improve strategies in the way apple does .
Ah. Now those are some people with real stones.
Even their vacuums suck.
Okay, I had to say it…
Apple is “trying” to extricate itself from Samsung?
“Do or do not. There is no try.”
I’m am very surprised and somewhat angry that it has taken Apple long to essentially get nowhere. This relationship should have been terminated long ago. Apple should use some of its cash to help suppliers build factories and buy equipment with extremely good loan terms or something like that or just help them outright to buy the equipment and than own it but letting them use it. But I am happy this relationship is coming to an end all so slowly.