As Apple slowly weans itself off Samsung parts, new iPhone drives a wedge between Korea and Taiwan

“Apple’s hotly anticipated iPhone 6 could be helping to break up one of Asia’s most dependable economic relationships,” Wayne Arnold reports for The Wall Street Journal. “”

“Factory output from South Korea and Taiwan long has moved almost in lockstep as both helped meet global technology demand. But Apple is trying to reduce its reliance for parts on smartphone rival Samsung Electronics, and the iPhone 6 could pull Taiwan more firmly into a production orbit independent of Korea’s,” Arnold reports. “But Apple’s rivalry with Samsung may now be straining that linkage. Apple has long accused Samsung, its contractor, of copying its designs for use by Samsung the smartphone maker, giving rise to a long-running legal battle.”

“As a result, Apple has been trying to wean itself from Samsung. It buys its flash-memory chips from Toshiba, according to IHS. Apple won’t say where it buys its touch-screens – the most expensive part of the iPhone, at $41 each – but analysts believe they come from Japan Display, LG Display, Sharp and possibly Toshiba,” Arnold reports. “But Apple still had to rely on Samsung to provide the iPhone’s microprocessor, the brains of the device.”

MacDailyNews Take: Samsung is merely the fab that stamps out Apple’s A-series SoCs.

Arnold continues, “Last year, Apple signed a deal with Taiwan Semiconductor Manufacturing Co.2330.TW +0.41%, or TSMC, to start providing it with microprocessors for iPhones and iPads this year. The iPhone will likely be powered by TSMC’s A8 chip when it’s launched later this year.”

MacDailyNews Take: Again, it’s Apple’s A8 chip, not TSMC. TSMC is merely the fab that stamps out Apple’s A-series SoCs.

Read more in the full article here.

26 Comments

  1. WSJ is kind of late with this article. Many iPhone 5S have nothing besides A7 chip from Samsung — not even flash memory, let alone displays and everything else (some still have flash memory from Samsung).

  2. Article goes on to chronicle how gradually Samsung is beginning to feel the impact of it’s ruined relationship with Apple. As Apple continues to gain market share and further differentiate it’s products from Android, and competition begins moving up the in the Android Sphere, there will be a slowly, but importantly, growing negative impact on Samsung. It may take another 3 – 5 years, but, for sure, Samsung’s days are numbered regarding it’s stay at the top of the heap of electronics manufacturing.

    1. My in-laws were going to buy a new washer / dryer combo last year and had already picked out a Sumsang pair, until I told them about Sumsang’s lying / thieving ways. So, they bought an LG. Sure, Sumsang didn’t feel it, but I sure felt better.

      1. I freaking love this. I am the same way. I continue to promote Shamsungs ways to friends, etc. simply because I am a firm believer in quality products, as well as genuine integrity as a company or business. I just cant support them and had I known before I got my TV a few years ago, I would have opted for some other brand as well.

  3. “Apple’s hotly anticipated iPhone 6 could be helping to break up one of Asia’s most dependable economic relationships,”

    I think you’ll find that Samsung’s attempts to copy Apple’s products is what actually broke up one of Asia’s most dependable economic relationships.

    If one partner cheats on another, the relationship is weakened. If that partner is unapologetic about that cheating and tries to pretend that they didn’t do what they were caught doing, then there is no hope for that relationship.

    Samsung used to have an excellent customer. Apple was buying incredible quantities of Samsung parts and tended to regard Samsung as the default supplier for many parts, but Samsung proved to be untrustworthy. Apple has found excellent alternative suppliers and Samsung’s rivals are now benefitting from the business that used to be Samsung’s.

    1. Well said. Want is also important to understand is that is takes a long time to switch suppliers especially when Apple needs 150M+ phones a year. Ensuring component supply is critical and something the analyst fail to commend Cook for achieving.
      Those who followed and bought Apple products back in the 1990s and early 2000s will remember products being on back order for months. The first metal Powerbook took 2-3 months to be delivered. G4 processors were always in scarce supply. And Apple were selling only 4-5M units at that time.
      Therefore it is vital to ensure that supply is available. For the new A8, TMSC has been given a lot of time to ramp up and they will have to get it right. Displays I believe are still being supplied in part by Samsung since the other suppliers particularly Sharp have internal issues.
      Give it time and Apple will completely shut out Samsung. The billions they are and will lose completely outweighs the gain from selling copy cat phones.

      1. The permanent shutoutification of Samsung is well underway. 🙂 Must be a beeyotch to be a company like Samedung with no scruples and have to finally accept the repercussions of your actions. Paying the Piper.

        Count on the current South Korean CEO to be shown the door relatively soon but doubtful their business practices & tactics will change, it’s too ingrained. But with no access to Apple’s future R&D it’ll be a much harder row to hoe.

  4. In our household Samdung has lost the sale of 2 TVs a few years ago and now when we move I talked my wife out of their washer and dryer. We do not like liars, cheaters and thieves. Got to love it when you can convince your wife that spending a few extra dollars for something is better than giving any kind of profit to these type of companies. We are a total Apple family owning almost all their products that just work and work together.

  5. “Merely” the fab? MDN (whoever he is) proves yet again, how woefully ignorant and simple minded he is. If MDN thinks it is so easy to fab processors, why doesn’t he do it? Set up in his mom’s basement, right next to his bed, and fab away.

    Apple can easily afford to build a fab. They cost a few billion dollars to build, which is chump change for Apple, but they have not done so, because running a fab is very involved,and getting a high rate of usable parts is even more esoteric.

    It would be easier for Apple to just buy Samsung’s chip fab and by easy, I mean it would be easier to convince them to sell it!

    Stupid, stupid comment, from a stupid, stupid, over-opinionated idiot.

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