updated 07:17 am EDT, Mon October 15, 2012
Apple set to source components from alternative supply sources
A Samsung official speaking on the condition of anonimity has told a South Korean newspaper The Korea Times that Apple’s parts relationship with Samsung is on the verge of collapse. "Apple...has made it clear it will no longer use its rival's technology, according to a senior Samsung official," the report by the Korea Times said. Late last week, it emerged that Apple is planning to shift its chip fabrication from Samsung to TSMC for the A7 processor, which is thought to be a quad-core design built on a 20nm process.
Although the new dual-core 32nm Apple A6 processor continues to be manufactured by Samsung, Apple completed the new design entirely in-house. "Apple did all the design and we [Samsung] are just producing the chips on a foundry basis." In the past, Apple had worked with Samsung on the chip development and the design. Apple’s acquisitions of PA Semi and Intrinsity in recent years further suggest that the company is looking to take its future into its own hands when it comes to the manufacture of its internal components.
With Samsung now firmly established as Apple’s biggest competitor in the mobile space and with the two companies locked in court battles, their partnership may be near its end. As Samsung’s biggest customer, Apple’s parts orders amounted to billions of dollars in business. Flash memory orders from Samsung are also said to be in jeopardy. "It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client," Park Hyun, a senior analyst at Tongyang Securities told The Korea Times.
Apple and Samsung have both been embroiled in well-documented court cases around the globe with Samsung suffering the most significant defeat to date in the U.S. where it lost a case, which could cost it at least $1 billion in damages to Apple. Although both companies maintained that their parts and supplier arrangement was separate from their dealings as competitors, the two companies have become increasingly estranged. [via Cnet]