The guys at the mobile device division must be in great trouble cause one thing is have a legal battle that can be costly but another is lose the parts business that has good profits and greater margin cause the volume compared to the mobile devices. Just a rumor like that should hit hard samsung stock. Right now they are on RED 2.0% bellow (Samsung Electronics Korea)
I would think that someone right now is spitting blood if this move is correct. $8bn in lost component sales is one thing, whilst $8bn of sales going to your competitor is just gonna grate.
And where does it leave the components business when the smaller electronics business is busy ripping off your component customers?
Rubbish, Apple just need to open a fab plant and have the staff provided by US prisons. They could churn out product cheaper than foxcon.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
Rubbish, Apple just need to open a fab plant and have the staff provided by US prisons. They could churn out product cheaper than foxcon.
Quote:
Originally Posted by akhomerun
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
Yeah, that sounds like a PR coupe: iPads! Built with prison labor! If it catches on, we can start to wonder if large corporations aren't funding lobbying efforts towards even more draconian sentencing laws, to make sure that supply of cheap labor keeps expanding. Nothing like yoking your economic engine to incarceration rates, what could go wrong?
Plus, instead of some anonymous foreigner taking a header off a building, we could interviews with the parents of the boy who was imprisoned on a drug offense who died while working for Apple. Good times.
It can cut both ways. If samsung is first to market with new technologies like quantum dot displays, Apple might not be given a look in if they want to use them if they piss-off Samsung too much.
Everyone seems to be ignoring the gorilla. There are very good reasons Apple have been using Samsung, they have been able to deliver quality and volume at competitive prices. Apple would have been using other suppliers if they could do better than Samsung.
So one or all of quality, price and volume are going to suffer. Apple might find it has to sacrifice it's profit margin a bit in order to move away from Samsung. Otherwise known as 'Cutting off your nose to spite your face.'
You're wildly overstating Samsung's position. They're an efficient manufacturer with a lot of capacity that has done some good work advancing technology. But they're hardly the only game in town.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
I can see the first prison murder with a shiv made from a DIMM hitting the headlines
You're wildly overstating Samsung's position. They're an efficient manufacturer with a lot of capacity that has done some good work advancing technology. But they're hardly the only game in town.
So your argument would be that Apple have been sourcing parts from Samsung out of either the goodness of their hearts or they just pulled a name out of a hat at random as a supplier?
I didn't say they are the only game in town, just that as far as Apple has been concerned, they were the best game in town.
You can't have your cake and eat it too. Either Apple had very good reasons for doing business with Samsung, or they didn't. If they didn't, then they were stupid, if they did, and the fundamentals of the parts supplier landscape hasn't changed whereby others have now overtaken Samsung in capability - which they haven't, then Apple is going to have to settle for second best in terms of suppliers.
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
So your argument would be that Apple have been sourcing parts from Samsung out of either the goodness of their hearts or they just pulled a name out of a hat at random as a supplier?
I didn't say they are the only game in town, just that as far as Apple has been concerned, they were the best game in town.
You can't have your cake and eat it too. Either Apple had very good reasons for doing business with Samsung, or they didn't. If they didn't, then they were stupid, if they did, and the fundamentals of the parts supplier landscape hasn't changed whereby others have now overtaken Samsung in capability - which they haven't, then Apple is going to have to settle for second best in terms of suppliers.
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
I take this article with a huge pinch of salt.
Apple's new A6 is targeted at 28nm process technology which only a few global foundries can produce. Maybe Samsung has encountered some difficulties and Apple has decided to go with another vendor. Plus as anyone in the industry knows, even if the wafer foundry division is run by different folks from the mobile division at Samsung, they all talk and share info. The mobile execs know exactly what the A5 costs and what margin is extracted from Apple. I think it's a good move to steer your custom processor, the soul of Apple iPhones/iPads, away from your biggest competitor. Keep the generic memory chips business there.
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
Like I said earlier, if TSMC outbids Samsung for fabbing A6 chips, ie, they'll charge less than Samsung, oh yeah, Apple should switch. Samsung is not a monolithic company. They are a conglomerate with independent companies operating under their own rules.
If Samsung Semi gives preferential treatment to the Samsung products divisions, Samsung Semi risks outside companies with not contracting with them due to that behavior. It always cuts both ways.
Lastly, the iPhone Retina Display was the best cell phone display in 2010, and is still among the best displays in 2011. It is still the most energy efficient display today. Apple made the right decision with the Retina Display for the iPhone 4.
Quote:
I take this article with a huge pinch of salt.
Always a good idea. But there are many fish in the sea. You should never become dependent on a sub-contractor, and you should play your subs against each other to get the best prices.
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Japan's wages are lower. Total different world over here.
Sadly, I don't see any signs that this is true. I wish it were, but there has not yet been an massive onshoring.
Possibly the reason you don't hear much is that the jobs being generated here are not for idiots. If you are tuned in you will find all sorts of companies complaining about the quality of the American worker, that is the lack of basic skills that would allow them to performa in an advanced manufacturing facility. Conversely many companies don't spend a cent on training their work forces so really the problem is with very short sighted management.
It is really sad to realize that companies in the 1800's and early 1900's put more effort into maintaining their workforces than most modern day organizations. In any event you won't see massive onshoring because that isn't how business works. Each and every move has to be justified. More so there was never a massive move to off shoring in the first place.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
The only problem is that you have to pay prisoners minimum wage, anyway - which is still many times higher than they're earning in China and other third world countries.
Quote:
Originally Posted by TBell
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Please name these studies.
Look, I've been doing international trade most of my career. I've purchased components around the world. In the majority of cases, US manufacture doesn't compete. In fact, for most items, we're not even close. And that's even factoring in duties, taxes, and shipping costs - as well as an allowance for the costs of quality. The few cases where it does compete are cases where labor content is relatively low and shipping costs are high.
The example you cite (autos) is greatly misleading. Most of the Toyota and Honda factories here are replacing domestically manufactured cars from U.S. manufacturers. There is very little evidence for replacement of imports (other than the case where imports were set up as a temporary measure to build market share. Plus, of course, shipping costs for an auto are significant. Shipping costs for a semiconductor are insignificant.
But I'll be happy to see your evidence. Show me where U.S. manufactured products are replacing imports in any quantity. And then explain how that is consistent with our trade deficit continuing to grow.
Last I knew Apple was employing well over 85% of Samsungs custom manufacturing capacity. If Apple expects to double shipments of A5/A6 processors they may have to second source simply to meet demand. Not to mention how screwed they would be if the plant had even a minor setback.
In any event Samsung is a major player in the alliance and is focused on low power tech. Apple could go to the other members but these members aren't focused on low power the way Samsung is. Further only a couple of them have substantial ability doing custom fabrication.
It will be very interesting if Apple does go the TSMC route. It could potentially set back A6 development. I'd be very interested to know if Global Foundries is getting any play with this manufacturing partner search.
The example you cite (autos) is greatly misleading. Most of the Toyota and Honda factories here are replacing domestically manufactured cars from U.S. manufacturers. There is very little evidence for replacement of imports (other than the case where imports were set up as a temporary measure to build market share. Plus, of course, shipping costs for an auto are significant. Shipping costs for a semiconductor are insignificant.
Absolutely right, in fact it's hard to find a developed nation that doesn't have a substantial domestic car industry for those reasons and more such as strong local market differentiation in both regulation and consumer taste. Even industrial basket cases like the UK still make cars.
The USA could have a contract Fab industry though, it would just have to pay for it - why did AMD site it's fabs in Dresden?
Obviously government subsidies played a large role in AMD's decision to bring Fab 36 to Dresden. Dr. Hans Deppe listed the total amount of government subsidies for Fab 36 as 500 million US dollars.
...will have inferior components, or more expensive ones. It already happened with super Amoled displays...
The pentile super amoled screens were shite, there was nowhere near enough production capacity to make 25 million plus high resolution iPhone 4/iPod touch displays.
In Apple's case super amoled is an inferior product.
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Toyota and Honda opened shops here (along with other "Foreign" care companies) because of the threat of extra fees placed on their imported goods. If more than a certain number their cars are made overseas, the fee per car increases dramatically. This is because Chevy, Ford, etc all said they "Couldn't Compete" with cheap foreign labor, demanding that the government "protect American companies" by leveling the playing field. Then as soon as these laws passed (with loopholes in place for American companies) they shipped overseas.
Honda and other companies also don't have the massive Pensions that american companies do, which contribute thousands of dollars to the cost of each "american" car.
It's that pension burden + "protectionism" that allows american companies to go overseas while bringing foreign jobs here. Taxes and higher wages are a factor as well, but our protectionist laws make it a whole lot easier for companies to move overseas.
But your entire example is missing the point of my main argument: It is CONSUMERS who are demanding cheaper prices for their products above almost everything else. Above Quality (with very few exceptions), above location, etc. Sure, there is a growing "Fair Trade" movement, but people still are largely driven to where items are cheapest no matter any other factors (save branding).
Until consumers are willing to pay a premium for the "Made in the USA" tag, there is little incentive for companies to assume the higher cost of doing business here. Then there is the customer ignorance issue, where a lot of the "buy american!" supporters are still driving Fords and Chevy's instead of a Toyota, Honda, or Subaru.
And as was noted numerous times in the SAMOLED vs retina articles that popped up soon after, it depended on what you were looking for.
You want, crisp, clean, non pixelated pictures or display? Then you were pointed to the retina.
If you wanted color, viewing angle, or less Eye strain in certain conditions? You went for the SAMOLED.
Personally considering the fact that the SAMOLED screen managed to eliminate intermediate glass planes and still emit less radiation than many LCD phones, I'd say that's pretty impressive.
Sadly, I don't see any signs that this is true. I wish it were, but there has not yet been an massive onshoring.
I has been happening for more costly to ship products, particularly if the raw materials come from close by.
An example is the GM Volt batteries, which were originally to be produced in Korea, but production was moved to USA because of raw material and final product shipping costs.
With micro chips shipping weight is not nearly as great an influence on plant location, but the automated production machines are not so influenced by labor costs.
Comments
The guys at the mobile device division must be in great trouble cause one thing is have a legal battle that can be costly but another is lose the parts business that has good profits and greater margin cause the volume compared to the mobile devices. Just a rumor like that should hit hard samsung stock. Right now they are on RED 2.0% bellow
I would think that someone right now is spitting blood if this move is correct. $8bn in lost component sales is one thing, whilst $8bn of sales going to your competitor is just gonna grate.
And where does it leave the components business when the smaller electronics business is busy ripping off your component customers?
Rubbish, Apple just need to open a fab plant and have the staff provided by US prisons. They could churn out product cheaper than foxcon.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
Rubbish, Apple just need to open a fab plant and have the staff provided by US prisons. They could churn out product cheaper than foxcon.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
Yeah, that sounds like a PR coupe: iPads! Built with prison labor! If it catches on, we can start to wonder if large corporations aren't funding lobbying efforts towards even more draconian sentencing laws, to make sure that supply of cheap labor keeps expanding. Nothing like yoking your economic engine to incarceration rates, what could go wrong?
Plus, instead of some anonymous foreigner taking a header off a building, we could interviews with the parents of the boy who was imprisoned on a drug offense who died while working for Apple. Good times.
It can cut both ways. If samsung is first to market with new technologies like quantum dot displays, Apple might not be given a look in if they want to use them if they piss-off Samsung too much.
Everyone seems to be ignoring the gorilla. There are very good reasons Apple have been using Samsung, they have been able to deliver quality and volume at competitive prices. Apple would have been using other suppliers if they could do better than Samsung.
So one or all of quality, price and volume are going to suffer. Apple might find it has to sacrifice it's profit margin a bit in order to move away from Samsung. Otherwise known as 'Cutting off your nose to spite your face.'
You're wildly overstating Samsung's position. They're an efficient manufacturer with a lot of capacity that has done some good work advancing technology. But they're hardly the only game in town.
Tim Cook walks into the foyer of TSMC in Taiwan.
The music playing is Nick Caves "Into my Arms" is playing.
They may not believe in an interventionist god but if this comes off they will have to have a long think about it.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
I can see the first prison murder with a shiv made from a DIMM hitting the headlines
I can see the first prison murder with a shiv made from a DIMM hitting the headlines
Plus you'll be able to get the designs for the next generation product by bribing somebody with a pack of luckies. That will save engadget a fortune
You're wildly overstating Samsung's position. They're an efficient manufacturer with a lot of capacity that has done some good work advancing technology. But they're hardly the only game in town.
So your argument would be that Apple have been sourcing parts from Samsung out of either the goodness of their hearts or they just pulled a name out of a hat at random as a supplier?
I didn't say they are the only game in town, just that as far as Apple has been concerned, they were the best game in town.
You can't have your cake and eat it too. Either Apple had very good reasons for doing business with Samsung, or they didn't. If they didn't, then they were stupid, if they did, and the fundamentals of the parts supplier landscape hasn't changed whereby others have now overtaken Samsung in capability - which they haven't, then Apple is going to have to settle for second best in terms of suppliers.
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
I take this article with a huge pinch of salt.
So your argument would be that Apple have been sourcing parts from Samsung out of either the goodness of their hearts or they just pulled a name out of a hat at random as a supplier?
I didn't say they are the only game in town, just that as far as Apple has been concerned, they were the best game in town.
You can't have your cake and eat it too. Either Apple had very good reasons for doing business with Samsung, or they didn't. If they didn't, then they were stupid, if they did, and the fundamentals of the parts supplier landscape hasn't changed whereby others have now overtaken Samsung in capability - which they haven't, then Apple is going to have to settle for second best in terms of suppliers.
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
I take this article with a huge pinch of salt.
Apple's new A6 is targeted at 28nm process technology which only a few global foundries can produce. Maybe Samsung has encountered some difficulties and Apple has decided to go with another vendor. Plus as anyone in the industry knows, even if the wafer foundry division is run by different folks from the mobile division at Samsung, they all talk and share info. The mobile execs know exactly what the A5 costs and what margin is extracted from Apple. I think it's a good move to steer your custom processor, the soul of Apple iPhones/iPads, away from your biggest competitor. Keep the generic memory chips business there.
I wonder who will Blink first ??
9
Alienating the best parts supplier in the business doesn't seem very smart to me. It ultimately means Samsung will be competing against Apple, producing devices incorporating the best components available while Apple products will have inferior components, or more expensive ones. It already happened with super Amoled displays.
Like I said earlier, if TSMC outbids Samsung for fabbing A6 chips, ie, they'll charge less than Samsung, oh yeah, Apple should switch. Samsung is not a monolithic company. They are a conglomerate with independent companies operating under their own rules.
If Samsung Semi gives preferential treatment to the Samsung products divisions, Samsung Semi risks outside companies with not contracting with them due to that behavior. It always cuts both ways.
Lastly, the iPhone Retina Display was the best cell phone display in 2010, and is still among the best displays in 2011. It is still the most energy efficient display today. Apple made the right decision with the Retina Display for the iPhone 4.
I take this article with a huge pinch of salt.
Always a good idea. But there are many fish in the sea. You should never become dependent on a sub-contractor, and you should play your subs against each other to get the best prices.
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Japan's wages are lower. Total different world over here.
Sadly, I don't see any signs that this is true. I wish it were, but there has not yet been an massive onshoring.
Possibly the reason you don't hear much is that the jobs being generated here are not for idiots. If you are tuned in you will find all sorts of companies complaining about the quality of the American worker, that is the lack of basic skills that would allow them to performa in an advanced manufacturing facility. Conversely many companies don't spend a cent on training their work forces so really the problem is with very short sighted management.
It is really sad to realize that companies in the 1800's and early 1900's put more effort into maintaining their workforces than most modern day organizations. In any event you won't see massive onshoring because that isn't how business works. Each and every move has to be justified. More so there was never a massive move to off shoring in the first place.
you know this could actually be a really effing good idea. i mean we have the largest prison population, we should make them manufacture all kinds of cheap stuff. not just license plates
The only problem is that you have to pay prisoners minimum wage, anyway - which is still many times higher than they're earning in China and other third world countries.
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Please name these studies.
Look, I've been doing international trade most of my career. I've purchased components around the world. In the majority of cases, US manufacture doesn't compete. In fact, for most items, we're not even close. And that's even factoring in duties, taxes, and shipping costs - as well as an allowance for the costs of quality. The few cases where it does compete are cases where labor content is relatively low and shipping costs are high.
The example you cite (autos) is greatly misleading. Most of the Toyota and Honda factories here are replacing domestically manufactured cars from U.S. manufacturers. There is very little evidence for replacement of imports (other than the case where imports were set up as a temporary measure to build market share. Plus, of course, shipping costs for an auto are significant. Shipping costs for a semiconductor are insignificant.
But I'll be happy to see your evidence. Show me where U.S. manufactured products are replacing imports in any quantity. And then explain how that is consistent with our trade deficit continuing to grow.
Everyone is thinking TSMC here but we all need to realize that Samsung is part of an alliance that has a number of members. This alliance has at least somewhat common design tools so the easy path doesn't flow to TSMC. Here is some news: http://www.samsung.com/global/busine...o?news_id=1176, another: http://www-03.ibm.com/press/us/en/pr...ease/32003.wss and more to the point: http://www.commonplatform.com/
In any event Samsung is a major player in the alliance and is focused on low power tech. Apple could go to the other members but these members aren't focused on low power the way Samsung is. Further only a couple of them have substantial ability doing custom fabrication.
It will be very interesting if Apple does go the TSMC route. It could potentially set back A6 development. I'd be very interested to know if Global Foundries is getting any play with this manufacturing partner search.
The example you cite (autos) is greatly misleading. Most of the Toyota and Honda factories here are replacing domestically manufactured cars from U.S. manufacturers. There is very little evidence for replacement of imports (other than the case where imports were set up as a temporary measure to build market share. Plus, of course, shipping costs for an auto are significant. Shipping costs for a semiconductor are insignificant.
Absolutely right, in fact it's hard to find a developed nation that doesn't have a substantial domestic car industry for those reasons and more such as strong local market differentiation in both regulation and consumer taste. Even industrial basket cases like the UK still make cars.
The USA could have a contract Fab industry though, it would just have to pay for it - why did AMD site it's fabs in Dresden?
Obviously government subsidies played a large role in AMD's decision to bring Fab 36 to Dresden. Dr. Hans Deppe listed the total amount of government subsidies for Fab 36 as 500 million US dollars.
Source : http://www.anandtech.com/show/1821
...will have inferior components, or more expensive ones. It already happened with super Amoled displays...
The pentile super amoled screens were shite, there was nowhere near enough production capacity to make 25 million plus high resolution iPhone 4/iPod touch displays.
In Apple's case super amoled is an inferior product.
That is BS. Toyota and Honda build cars here, and the pricing is competitive with cars built overseas. Further, many studies have been done to show the alleged cost savings. When American companies went overseas, the cost didn't drop on the products. The move was about greed. They wanted more profit margins, and less red tape. According to many studies, it actually isn't a great savings to build overseas because of issues like paying different types of taxes, like greasing the Communist parties hands.
Toyota and Honda opened shops here (along with other "Foreign" care companies) because of the threat of extra fees placed on their imported goods. If more than a certain number their cars are made overseas, the fee per car increases dramatically. This is because Chevy, Ford, etc all said they "Couldn't Compete" with cheap foreign labor, demanding that the government "protect American companies" by leveling the playing field. Then as soon as these laws passed (with loopholes in place for American companies) they shipped overseas.
Honda and other companies also don't have the massive Pensions that american companies do, which contribute thousands of dollars to the cost of each "american" car.
It's that pension burden + "protectionism" that allows american companies to go overseas while bringing foreign jobs here. Taxes and higher wages are a factor as well, but our protectionist laws make it a whole lot easier for companies to move overseas.
But your entire example is missing the point of my main argument: It is CONSUMERS who are demanding cheaper prices for their products above almost everything else. Above Quality (with very few exceptions), above location, etc. Sure, there is a growing "Fair Trade" movement, but people still are largely driven to where items are cheapest no matter any other factors (save branding).
Until consumers are willing to pay a premium for the "Made in the USA" tag, there is little incentive for companies to assume the higher cost of doing business here. Then there is the customer ignorance issue, where a lot of the "buy american!" supporters are still driving Fords and Chevy's instead of a Toyota, Honda, or Subaru.
The pentile super amoled screens were shite.
And as was noted numerous times in the SAMOLED vs retina articles that popped up soon after, it depended on what you were looking for.
You want, crisp, clean, non pixelated pictures or display? Then you were pointed to the retina.
If you wanted color, viewing angle, or less Eye strain in certain conditions? You went for the SAMOLED.
Personally considering the fact that the SAMOLED screen managed to eliminate intermediate glass planes and still emit less radiation than many LCD phones, I'd say that's pretty impressive.
Sadly, I don't see any signs that this is true. I wish it were, but there has not yet been an massive onshoring.
I has been happening for more costly to ship products, particularly if the raw materials come from close by.
An example is the GM Volt batteries, which were originally to be produced in Korea, but production was moved to USA because of raw material and final product shipping costs.
With micro chips shipping weight is not nearly as great an influence on plant location, but the automated production machines are not so influenced by labor costs.