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Samsung's Stephen Woo  (Source: i.i.com.com)
Apple will purchase about $8.8 billion USD worth of chips from Samsung this year, but then decline

With Samsung and Apple's relationship turning sour in recent years due to patent litigation, Samsung recognizes that it must move on and supply its chips elsewhere -- and it's looking to new Chinese entrants in the mobile market.

At the Consumer Electronics Show (CES) in Las Vegas this week, Samsung's President of LSI business Stephen Woo said that it's crucial for the South Korean electronics maker to focus on alternatives to Apple when it comes to the chip sector.

"As there are just two smartphone makers that are doing really well, chipmakers supplying them have grown in tandem. So we plan to bolster our relationship with those key customers," said Woo.

"(We) should diversify our customer base and are making such efforts already, adding some Chinese customers. We see emerging players who have potential to grow in smartphones and we will continue to make efforts to supply them with our chips."

Samsung has already made a bit of headway in its latest decision. It has been supplying Exynos quad-core chips to Chinese smartphone company Meizu and also to Lenovo's K860 LePhone.

Samsung is forced to move on to other chip customers now that Apple has turned into an enemy. Samsung was the main supplier of Apple's iPhone and iPad chips, which made up a bulk of Samsung's chip-making efforts along with its own Galaxy line. However, after a nasty patent war broke out between the two nearly two years ago, Apple has been distancing itself and will make its own chips.

According to Goldman Sachs, Apple will purchase about $8.8 billion USD worth of chips from Samsung this year, which is about 80 percent of Apple's allowance for processors, memory chips and screens. But Apple is expected to move 30 percent of its business away from Samsung next year and about 80 percent by 2017 -- meaning Samsung better find new clients.

Source: Reuters



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Reality check
By bug77 on 1/10/2013 11:34:47 AM , Rating: 5
quote:
..Samsung better find new clients before it sinks.


Do you think Samsung will sink if their chip division will take a hit? Did you check how large Samsung is? Here's a hint: http://en.wikipedia.org/wiki/Samsung#Operations

That statement is far-fetched even if you actually meant Samsung Electronics.




RE: Reality check
By Cheesew1z69 on 1/10/2013 11:37:31 AM , Rating: 2
Samsung isn't going to sink...LOL


RE: Reality check
By protomech on 1/10/2013 12:12:26 PM , Rating: 2
Too big to fail, huh.


RE: Reality check
By Tony Swash on 1/10/13, Rating: -1
RE: Reality check
By Cheesew1z69 on 1/10/2013 12:27:34 PM , Rating: 5
Here is a "who gives a fuck what Tony has to say"..


RE: Reality check
By retrospooty on 1/10/2013 1:15:26 PM , Rating: 2
HERe is some interesting info too, since profit seems to be important to you.

http://vr-zone.com/articles/samsung-records-a-reco...


RE: Reality check
By bug77 on 1/10/2013 1:58:21 PM , Rating: 2
Are you worried about Samsung? Because we already know they make a lot of chips for Apple. Also, more chips in the market mean lower prices for us, even it will hurt the manufacturer some.


RE: Reality check
By StevoLincolnite on 1/10/2013 1:24:05 PM , Rating: 2
quote:
Too big to fail, huh.


Well. Considering Samsung is worth something like 20-25% of South Korea's entire GDP, I would think that the South Korean Government would probably prop them up if they do ever falter in the future.
Samsung literally prints money for the country after all...

With that said, Samsung is incredibly diverse, phones, white goods, televisions, insurance, ships... They pretty much handle everything. Chip making is a relatively small portion of the company, albeit very profitable.


RE: Reality check
By Yongsta on 1/10/2013 1:53:07 PM , Rating: 2
Refrigerators, microwaves, memory chips, washing machines, dryers, cameras, radios, buildings / engineering (Three tallest buildings in world by Samsung C&T. They also do bridges, power plants, etc.), Advertising, clothing (took over Fubu), Gas Turbines, Helicopter Engines, Jet Engines, Weaponry (Samsung Techwin). They have their hand in almost everything.


RE: Reality check
By messele on 1/10/13, Rating: 0
RE: Reality check
By Yongsta on 1/10/2013 3:38:45 PM , Rating: 2
Narcotics Trafficking? Never heard of that before but you can insert forms of Money Laundering, Bribery, Human Labour Trafficking, and Political Corruption for a vast majority of the large corporations across the globe.


RE: Reality check
By retrospooty on 1/10/2013 3:38:49 PM , Rating: 5
They may be all that, but at least they aren't Apple ;)


RE: Reality check
By messele on 1/11/2013 6:03:57 PM , Rating: 1
Yeah huh huh they sux!!!

Get your adenoids out of your bung-hole, Beavis.


RE: Reality check
By OnyxNite on 1/10/2013 12:13:14 PM , Rating: 2
Also I don't believe Apple will make it's own chips as the article states. Apple has no fabs and to my knowledge has no plans to make any... if they do then THAT is pretty big news. It is my understanding they are moving their business from Samsung to TSMC NOT internal.


RE: Reality check
By Colin1497 on 1/10/2013 12:48:23 PM , Rating: 2
Apple is said to be moving business to TSMC.


RE: Reality check
By maugrimtr on 1/11/2013 10:42:01 AM , Rating: 2
They are also spending billions to equip and gain exclusive access to certain fabs and manufacturing facilities. In essence, they are building their own manufacturing base without taking on the risks of ownsership, staffing and local politicking. Why? Imagine the furore if Apple directly employed workers in China - that just one tiny example of how they're passing risk to anyone else.


"A lot of people pay zero for the cellphone ... That's what it's worth." -- Apple Chief Operating Officer Timothy Cook














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