“According to a new report from Asia today, an ‘Apple tsunami’ is impacting on Samsung’s logic chip division, cornering top management to implement contingency plans to find new clients as Apple moves to other sources,” Jack Purcher reports for Patently Apple.
“According to IC Insights, a leading market research firm, Samsung reported $4.33 billion in revenue by supplying customized applications, last year, with Apple making up 89 percent of them or some $3.8 billion,” Purcher reports. “Mark Newman at Sanford C. Bernstein in Hong Kong said that going into 2014, Apple will start to use Taiwan’s TSMC so Samsung needs to find alternative customers for their own processor chips.”
Purcher reports, “There’s no one yet that’s going to fill the void due to Apple’s exit.”
Read more in the full article here.
[Thanks to MacDailyNews Reader “Chris Renaldi” for the heads up.]
Ouch!
Apple tsunami ?
More like a parched desert for Samsung after Apple leaves.
I think they meant to say AntiTsunami
Perhaps this is referring to the effect of a Tsunami where the water can pull back several hundred feet from the shoreline, leaving a try beach before the true destruction arrives.
How I interpreted it, anyway.
Yeah, I’m sure they’ll have no problems finding new clients. . .
Why would any company deal with them if they are going to rip off their clients ideas. It is a hell of their own making.
Business is business and corporations are not human beings. They don’t have feelings or consciousness. However, Samsung may have cheap copied of what Apple innovated and other crooked corporations may need that to survive.
Who would trust them with manufacturing. They ripped Apple off they will do the same to the next company that deals with them. They have created their own hell.
Maybe it’s a bad idea to bite the hand that feeds you?
In other news, Samsung has now come up with a cloned major chip customer to fill the spot left by a real major chip customer, and thus Samsung will be buying chips from themselves.
Surely Microsoft will need BILLIONS of chips for its Surface devices.
haaha, that is a good one. I have as yet never seen a surface device. I do not think our local Best Buy carries them. Smart on their part.
I’ve seen them at Staples, but that’s about it. One of the employees tried to sell me one. Probably didn’t notice that I was carrying around my iPad Mini. Why would I downgrade to Windows?
I’ve seen and used one. There are some legitimately interesting things about the Metro UI and how it handles multi-tasking. The biggest thing to me though was the build quality of the hardware. Nowhere even close to Apple’s, and even if Windows 8 / Metro / RT / WTFBBQ ever really matures and gains a strong ecosystem (which I doubt), the hardware will still feel cheap. It’s really sad that Microsoft can’t figure out how to make hardware, but then again, software is in their name. Apple is a hardware company, and they do it better than anyone else.
As I said they are earning too fast and too big to grow . They should earn like Amazon .
Karma, what goes around comes around for Samsung.
So, Samsung, why did you decide screwing your best customer seemed the optimal business model in the first place? For what you are about to lose you could have created a whole R&D dept. instead of relying on stealing innovation.
Apple was for all intents subsidizing Samsung. Never bite the hand that feeds you.
What problem? They only need to replace 89% of their manufacturing accounts.:)
Cue the “Samsung is in talks to acquire TSMC” rumor
Rumor is as rumor does!.
I miss you Jenny …
70% of their profits come from smartphones so I guess they are willing to take the hit, let’s hope its a Big one and the smartphone business drys up for them
I will rejoice as long as TSMC can produce components at least a good as Samsung for at least the same price. No point in feeling smug if the quality of Apple products deminish and costs increase.
hopefully this will also reduce the flow of Apple product info to Samsung. Production ramp ups are months before launch and knowing the type of components like chips and screens gives samsung a good idea of what Apple is trying to do and allows Samsung an advantage in creating their own product strategies.
True. There can be little doubt that Samsung gained an advantage by knowing Apple’s secrets.
But do the incessant rumor sites also give Apple’s competitors (not just Samsung) insights into Apple’s plans? For example, I saw an article the other day that Apple was planning 120 fps video on the iPhone. Isn’t the media’s never ending quest for a scoop about Apple’s secret plans also helping Apple’s competitors?
I can’t believe Samsung didn’t see it coming. That begs the question — what was the business calculation that went into the decision to proceed anyway?
I’m sure the chips side of the business raised their issues at what the handset guys were proposing to do. Was the market and business opportunity bigger on the handset side than the margins and business was on the chip/display supplier business? Or did they make a strategic decision to no longer be merely a supplier to the premium brands and attempt to become one themselves, no matter the cost?
Maybe some journalist will dig out the story in a few years’ time.
This implies that Apple’s “exit” from Samsung (as a supplier) will be sudden and complete. I highly doubt that scenario.
Apple is not going to put immediate trust in TSMC to be able to produce at the scale and quality level of Samsung. Apple will buy components from BOTH Samsung and TSMC (and others) for the immediate future.
Also, Samsung produces many components for Apple products. One key advantage Apple has over the competition is the ability to lock up (in advance) the production capacity of key components (at lower cost), and make it more expensive for the competition to product competing products. If Apple intentionally avoids Samsung, probably the largest producer of such components, it make Samsung’s production capacity available to the competition at lower cost, negating Apple high volume production advantage.
So, Apple will keep buying from Samsung indefinitely, while working with other suppliers. Samsung is not going to be forced to replace 89% of its electronics supply business. Don’t be ridiculous…
What “competition” could walk into samdung and negate Apple’s advantage?
HTC, Motorola, anyone… The point is that if Apple does not pay in advance, to “lock in” an advantageous fixed price for LATER production, Apple is not tying up a significant portion of Samsung’s production capacity for its sole use. Apparently, based on revenue, Apple is currently tying up almost 90% of Samsung’s production capacity!
If that production capacity is suddenly freed up, that means EVERYONE else gets significantly lower prices for components, because Samsung now has extraordinary excess capacity; maybe not lower than Apple is getting from “other” sources, but lower than they would have gotten if Apple was not intentionally avoiding Samsung as a supplier. Advantage competition…
Also, if Apple is intentionally avoiding Samsung as a supplier, it is likely that Apple own costs are higher. If you intentionally eliminate massive Samsung as a source, the available supply (for Apple) becomes more scarce, and the remaining suppliers can justify asking a higher price (compared to what Apple was getting from Samsung). Advantage competition…
Both of those outcomes negate Apple’s advantage of being able to purchase (or commit to future purchase) in huge volume, and get prices that are significantly lower. This also HELPS Samsung’s phone and tablet business, because Samsung supplies itself with many of those components, while Apple is “scrounging” around the remaining suppliers to meet its needs.
Apple is not stupid. Nothing good will come from Apple intentionally cutting off Samsung as a supplier. Maybe that 89% goes down to 79%, but it’s NOT suddenly going to 0%. Anyone who thinks THAT will happen has not given the situation and implications very much thought.
Samsung loses parts production accounts. Google loses access to the OSX and iOS toolbars. I’m sensing a trend here.
Samsung’s sinkhole…unused capacity.
Know where you don’t hear where Samsung will be?
The Car!
Samsung being tossed and turned in those churning Tsunami waters…
Samsung made a copy of Microsoft’s on how to dupe your business partner and forgot from whom they copied.
Forget a tsunami. I want Samsung to experience the perfect storm: Loss of its position in Apple’s supply chain AND judicial order to pay its $1.05 billion IP infraction award AND loss of demand for its mobile products due to Apple’s introduction of stunning new (and hard to copy) devices.
One can always dream…
Samsung reveales new “ā6” chips for phones and tablets. Not to be confused with the Apple “A6” chip as Samsung put a two dots over the lower case “a” so no confusion would occurr.
“No soup for you!”
Does MDN support small text?