Apple 'gets serious' about moving chip production away from Samsung - report - Page 2

Quote:

Originally Posted by Galbi 

Apple is notorious for squeezing their suppliers' profit margins to be hair thin.

 

I'm always amused by characterizations of free-market B2B contracts, negotiated between two very large corporate entities who are both fully capable of negotiating favorable terms in their own self-interest as big greedy Apple unfairly squeezing the little guy until they're forced to give up profit margins.

You forgot to mention that Apple promised to kill a newborn Labrador Retriever puppy for every $1000 in profit Samsung makes.

Quote:

Originally Posted by tooltalk 

 

 

 

ROFL!!  Firstly, Apple' share of Samsung Electronic's overall Sales is still less than 8% - and Apple wasn't even Samsung's largest customer until last year (Sony #1).  Even if you combine all the sales from Apple last several years, it couldn't still pay for Samsung's capital expenditure for 2012 or $41B.  Samsung and other South Korean component makers like Hynix and LG have been well "out in front" in semiconductor/display business since the 90's and it has very little or nothing to do with Apple, which back then was on the brink of collapse.  Samsung semi's revenue has been flat for years now and could possibly face a few disappointing quarters - after all, nobody, other than Samsung and Toshiba, is really making any money in the DRAM/NAND business now; almost everyone in the display business is losing money.  But that's the nature of their business; less to do with Apple. Samsung mobile can easily make up for the loss from the growing mobile and mobile components business.  

 

 Apple #1!!   LOL!!

 

Thank you for reinforcing my point about Samsung being an OEM manufacturer and not a R&D shop. 

Quote:

Originally Posted by Blastdoor 
... In fact, this is the sort of thing Apple would have done anyway. The real evidence of the rift is the alleged move to TSMC.

Yes.  Apple paid $278 million to acquire PA Semi and $121 million to acquire Intrinsity for their chip design expertise.  Apple can now do all their SoC designs in-house, and now they essentially control their own destiny in terms of SoC design.  They don't need to rely on arch rival Samsung for anything other than commodity components and chip mass-production.

Having said that, the PA Semi acquisition wasn't a defensive move against Samsung.  It happened in 2008, long before Samsung's blatant iPhone copying began.  The PA Semi and Intrinsity acquisitions were simply logical moves to reduce dependence on outside entities and to create better hardware designs.  (And maybe all those years of Motorola / IBM PowerPC indifference and incompetence, when Apple desperately needed faster PowerPC chips for Macs, helped to motivate the acquisitions.)

Expect to see Apple becoming one of Global Foundries larger clients at the Malta Foundry in Upstate New York.

Quote:

Originally Posted by Neo42 

 

So you're freely admitting you want Apple to become a monopoly in every industry possible?

You have no idea what an illegal monopoly is so please keep quiet. 

Quote:

Originally Posted by BigMac2 

 

Samsung is not a R&D shop, they are OEM manufacturer,  Samsung have not create their ARM design in-house, Intrinsity engineers was the real brains behind Samsung's CPU. 

so where was Apple's R&D and their superior chip design expertise in A4 and A5?  

Quote:

Originally Posted by tooltalk 

 

so where was Apple's R&D and their superior chip design expertise in A4 and A5?  

In pockets of millions of happy customers who are happy with their phone performance and efficiency. 

Quote:

Originally Posted by tooltalk 

 

 

ROFL!!  Firstly, Apple' share of Samsung Electronic's overall Sales is still less than 8% - and Apple wasn't even Samsung's largest customer until last year (Sony #1).  Even if you combine all the sales from Apple last several years, it couldn't still pay for Samsung's capital expenditure for 2012 or $41B.  Samsung and other South Korean component makers like Hynix and LG have been well "out in front" in semiconductor/display business since the 90's and it has very little or nothing to do with Apple, which back in the late 90's was on the brink of collapse.  Samsung semi's revenue has been flat for years now and could possibly face a few disappointing quarters - after all, nobody, other than Samsung and Toshiba, is really making money in the DRAM/NAND business now; almost everyone in the display business is losing money.  But that's the nature of their business; it has little to do with Apple. Samsung mobile can easily make up for the loss in the growing mobile (smartphone) and mobile components business.

 

 Apple #1!!   LOL!!

 

Source?  What numbers did you use for Apple's sales and what numbers did you use for Samsung's sales to get that 8%?

Quote:

Originally Posted by BigMac2 

In pockets of millions of happy customers who are happy with their phone performance and efficiency. 

let's all thank Samsung / Intrinsity.  thanx for reinforcing my point about Apple being a marketing/design company, not a technology shop.  

Another thing people seem to miss is that every billion Apple takes from Samsung is a billion they spend at one of Samsung's competitors. Money those competitors can use to improve their facilities and expand their production capabiltities. Or invest into R&D on newer technology.

Quote:

Originally Posted by tooltalk 

 

let's all thank Samsung / Intrinsity.

Ok Ill let's you thank Samsung for stealing their clients works, Ill thank Apple to keep bringing new OS and UI concept to the mass for the past 30 years. 

Hey tool, I see you're avoiding my question. Where are you getting your numbers from?

Quote:

Originally Posted by tooltalk 

 

let's all thank Samsung / Intrinsity.  thanx for reinforcing my point about Apple being a marketing/design company, not a technology shop.  

Saying Apple products design is about marketing is to ignore Apple core culture. Beside, how do you qualify Samesung?

Samsung is learning that there is a price to their corporate pride. The greater the pride the greater the price.

Vertical integration is essential to building an "ecosystem". Eventually there will be Apple, Amazon, Google and (maybe) Microsoft left when the dust settles. Samsung will have to exit the mobile market or create their own operating system and ecosystem.

Samsung richly deserves whatever they get.

That's right. Monopolistic practice is based on units sold, not the profits derived. Apple doesn't even meet that standard on the iPod which is still over 70% of the market after a decade.

Quote:

Originally Posted by EricTheHalfBee 

Hey tool, I see you're avoiding my question. Where are you getting your numbers from?

EricTheHalfBee:

  go to Samsung Electronics' investor relations and look up 2011 annual report.  Is that so hard to do?

Samsung Electronics and Consolidated Business 2011 income (sales) : 165,002B KRW or around $150B USD

hate to disappoint you - Apple may be a big consumer electronic giant now, but the world doesn't evolve around Apple. 

Quote:

Originally Posted by Jahblade 

Quote:

Originally Posted by IQatEdo 

I'll bet that any Samsung division responsible for fabricating chips for Apple would rather side with their client than with their parent.

I agree.. There is a similar situation in the company I work for.

yes, but division presidents like their jobs, and especially in Eastern Business Culture, it's all about being a company man.  You don't see too many Asian Corporate types resigning due to 'philosophical differences'

Quote:

Originally Posted by tooltalk 

 

EricTheHalfBee:

 

  go to Samsung Electronics' investor relations and look up 2011 annual report.  Is that so hard to do?

 

Samsung Electronics and Consolidated Business 2011 income (sales) : 165,002B KRW or around $150B USD

 

hate to disappoint you - Apple may be a big consumer electronic giant now, but the world doesn't evolve around Apple. 

You use an interesting choice of words here: "but the world doesn't evolve around Apple."  Even your subconscious knows your arguments regarding Apple ring false!

Quote:

Originally Posted by IQatEdo 

 

I'll bet that any Samsung division responsible for fabricating chips for Apple would rather side with their client than with their parent.

Unfortunately, as we learned from the patent trial, it was this Samsung chip division that initiated the "copy the hell out of Apple" report submitted to the Samsung phone division. ethics seems to be totally missing when it comes to South Koreans.

Quote:

Originally Posted by EricTheHalfBee 


Thanks for proving my point. Did you miss the word "consolidated" in their name? If you had read further you'd realize that the semiconductor and component divisions only make up about 30-35% (depending on quarter) of that amount. The $150 billion INCLUDES their smartphone sales, TV's, laptops, digital cameras, home theatre, camcorders....you name it.
In the first 6 months of 2012 Samsung Electronics sold about 92 trillion KRW and of that 27 trillion was semiconductors & displays. By my math that's only 29% of their total sales.
So Apple's sales of their semiconductor and display/components is more like 20% (or more) since I'm pretty sure the billions Apple spends dont go towards TV's and smartphones.
You going to come back and say 20% is an insignificant portion of their sales?
Thanks for playing, troll.

ROFL!!  Well, pathetic, but nice try. You fanboys really sound desperate. ROFL!!

Of course, $150B includes all Samsung mobile, semi sales as well as oversea sales by its foreign subsidiaries - that's what "consolidated" means.  That's precisely why I stated "Apple' share of Samsung Electronic's overall Sales is still less than 8%."   Whether Apple buys microwaves from Samsung's home appliance division or not is immaterial. 

try harder.   Apple fanboys not too bright   

Quote:

Originally Posted by EricTheHalfBee 

Another thing people seem to miss is that every billion Apple takes from Samsung is a billion they spend at one of Samsung's competitors. Money those competitors can use to improve their facilities and expand their production capabiltities. Or invest into R&D on newer technology.

Which means that Apple, in moving their business elsewhere, has twice the effect on Samsung's profits. 

I really hoped that the recent patent trial loss would have given Samsung a wake-up nudge that could have benefited both companies. Alas, the lack of ethics at Samsung is completely lacking.

Quote:

Originally Posted by digitalclips 

If Amazon buys Texas Instruments this gets very interesting indeed!

Actually for Amazon to buy a TI plant is an indication that someone at Amazon has lost their way.

First off, TI wouldn't sell one of their most modern factories. Secondly, once a plant is completed it is already racing toward obsolescence. It's extremely expensive to own a semiconductor factory, plus keeping the talent is hard. Any whiff of bad news and the engineers are gone faster than fruit pickers when the immigration police show up. Amazon will live to regret this purchase which Apple is too smart to even consider.

Quote:

Originally Posted by 65C816 

And the CPU guy used to be the VP of design at AMD for 16 years.  What's wrong with poaching him?  Who do you think designs stuff at Apple?  It's brilliant people - so why shouldn't they hire brilliant people?

I believe I read that he was only at Samsung for a few months (definitely less than a year) before leaving to go to Apple. Perhaps he didn't like it at Sammy.

Quote:

Originally Posted by digitalclips 

If Amazon buys Texas Instruments this gets very interesting indeed!

Yeah, Amazon buying TI sounds kind of silly to me. Like a rookie mistake one would expect from a sales company that thinks it's a hardware company.

I don't think we'll be seeing Apple buy chipmakers or foundries anytime soon, unless Tim Cook turns out to too much of a rookie too (but I think he learned to avoid that trap from Steve.)

Quote:

Originally Posted by Crowley 

I understand why this has happened, and I don't think the fault lies at Apple's feet to any great degree, but nevertheless it doesn't seem like a good development for the company to have a hateful relationship with anyone.  I hope Apple aren't going to take this down the road they did with Microsoft and IBM in the past, rivals are fine to have, but enemies just lead to destructive behaviour that distract from making good products.

 

Maybe I'm wrong and Apple can tap into this productively and make iPhones and iPads that blow Samsung even further out of the water.  But if they cut off their nose to spite their face then we all lose.

I don't think Apple is spiteful, but when a competitor threatens their customers, goals, or innovations (think, to various extents, Google, Adobe, Microsoft, Samsung) they will not allow it. They still have productive relationships with all these companies, but Apple will not allow themselves to be choked by them. Samsung is in a unique situation because they really screwed their largest and most lucrative partner. Apple really has no way to punish them but to cut them off. Sammy's going to feel some pain.

Quote:

Originally Posted by jragosta 

Obviously, at one point in time, Apple had little ARM expertise. They then went out and acquired it - via acquisition, hiring, and internal development. All that matters is that they have sufficient expertise TODAY, not several years ago.

As one of the original partners in developing Arm, Apple has never had "little ARM expertise."

But Apple, being an innovator and fast mover, shed itself of ARM when it didn't need it, and quickly brought itself back up to date when it made sense. That's one of the most amazing things about Apple. They know and understand technology and they use it as a tool to get things done. That's why they'll never buy a foundry. They know they don't exist to make chips. Chips exist so Apple can make useful products. It's easier to finance a chip foundry partner for a span of time than to actually buy a chip foundry and make chips.

Why buy a dairy farm when it's the milk you want?

Quote:

Originally Posted by Red Oak 

This cannot come soon enough. Given what I've observed with Samsung, I believe there is a 30% or greater chance the Samsung fabrication side of the business has shared confidential Apple CPU design info with their mobile team
@ $10 billion/year, Apple business is the equivalent to 20 million smartphone sales ($10B / $500 per phone). It's a major hit to their overall business
And wait until Apple enters the TV market. TVs are 25% of Samsung's business. The hurt for Samsung is just getting going
 

The blinkerdness of Apple devotees is just astonishing.

Samsung have demonstrated an Exynos chip with A15 cores, and you think they want or need to copy from Apple's chip efforts?

Quote:

Originally Posted by Suddenly Newton 

 

Are you aware that the terms "love-hate" and "hate-hate" is a purely "food coloring" added by the press?

I read The Korean Times regularly, and this is typical. If the story is about Japan, Japan is always completely wrong and always very sinister. If the story can be seen as between something Korean and anything else, very dramatic language is used to paint an Earth shattering conflict. I find that entertaining, but I take it with a grain of salt.

Quote:

Originally Posted by cnocbui 

The blinkerdness of Apple devotees is just astonishing.

 

Samsung have demonstrated an Exynos chip with A15 cores, and you think they want or need to copy from Apple's chip efforts?

LOL! 

Samsung would never copy anything. 

Quote:

Originally Posted by EricTheHalfBee 


Don't need to try harder, you're making a fool of yourself all on your own.
Anyone claiming that a division losing 20% of their sales isn't a disaster is kidding themselves.

Firstly, for Q1, Q2 of 2012, that's 92T KRWand and, of that, about 31T KRW came from Semi & DP or about 35%.  

For the whole fiscal year 2011, Samsung's semi & DP generated 66T KRW (or $60B USD) or roughly 40% of Samsung's entire 2011 revenue. Apple spent $7-$8B USD on Samsung components, or about 12+% of Samsung semi & DP revenue, or about 5% of Samsung Electronics' entire 2011 revenue.   Now if you add up Samsung batteries used in the new iPads (made by IM - IT & Mobile division) that the inflated figure 20% you cited would get much smaller (6%-7%)

For 2010, Apple spent $5.7B on Samsung parts, 9% of Samsung SEMI & DP revenue, or about 4% of Samsung's entire 2010 revenue. 

So, 9%?  12%?  meh!  Not really..  Samsung Semi & DP Q1 2012 yoy went down by 13%, you don't see Samsung weeping, do you?  Apple doesn't have a monopsony in component biz; there are other willing buyers waiting in line. Two years is long enough to find new less whiny customers.  As I've said earlier, there will be a couple of disappointing quarters, but there is enough growing demand outside Apple that, unfortunately for you, Samsung doesn't have to shut their door. Besides Samsung's mobile division (IM) is still growing at 40%-50% and, certainly by next year, it will be the largest buyer of Samsung semi & dp components.

Quote:

Originally Posted by Mode 5 

 

 

LOL! 

 

Samsung would never copy anything. 

LOL!!  Of course, everything Apple ever patented is completely original!   Ha! Ha! Ha!

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Originally Posted by tooltalk 

 

LOL!!  Of course, everything Apple ever patented is completely original!   Ha! Ha! Ha!

Well done, tops cnocbui, you too have a wonderful sense of irony. 

Do you guys write this stuff for a living, or is it just a hobby?

Originally Posted by Mode 5 
Do you guys write this stuff for a living, or is it just a hobby?

A little of both happens here.