Rumor: Samsung expecting to lose a portion of orders for future Apple chips

Posted:
in General Discussion edited January 2014
Samsung may put off construction of a new fabrication facility, according to a new rumor, because it is expected to lose some future chip orders from Apple.

Hit-or-miss technology industry publication DigiTimes, which is known for having a spotty track record with respect to anonymous sources, reported this week that Samsung Electronics is "likely" to delay construction of a new logic fabrication facility known as Line-17. The primary concern for Samsung is said to be the "possibility of losing a portion of orders for Apple's next-generation application chips."

Samsung plans to build the new semiconductor plant in Hwaseong, a city in the Gyeonggi Province of South Korea. Volume production has been planned to begin in the first quarter of 2014.

"However, Samsung will no longer be the sole supplier of Apple-designed chips that power the iPhone and iPad devices, the sources indicated," the report states. "The anticipated drop in orders from Apple has prompted Samsung to consider slowing the pace of its logic-IC capacity expansion."

Apple has long rumored to be pursuing a chipmaking partnership with Taiwan Semiconductor Manufacturing Co., though Samsung remains the sole supplier of Apple's custom chips found in the iPhone and iPad. One report from last month claimed that TSMC could begin building quad-core 20-nanometer chips for Apple as soon as late 2013.

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And in October it was said that Apple was getting "serious" about moving chip production away from Samsung. Around the same time, Apple also hired away former Samsung chip designer Jim Mergard, who also designed and developed chips for AMD for 16 years.

The growing reports could represent a concern on the part of Samsung that its chipmaking business will not grow as much as expected, with the potential loss of Apple as a major customer.

Apple was rumored earlier this year to have made an offer for around $1 billion that would have made TSMC a dedicated chip producer to Apple alone. The offer was allegedly rejected by TSMC, as the company was said to be interested in staying involved in the booming broader smartphone market.
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Comments

  • Reply 1 of 44
    "The growing reports could represent a concern on the part of Samsung that its chipmaking business will not grow as much as expected, with the potential loss of Apple as a major customer."

    But I thought their SG3 and Note and what not was doing extremely well, especially international markets that want cheap crap like the continent of Africa and Latin America? Why not use that "proposed" fabrication plant to build chips for their own items since they are so successful?
    /
    /
  • Reply 2 of 44
    If Apple intends to switch away from Samsung for logic fabrication, it's obviously to their benefit to keep Samsung in the dark as long as possible. However, if Apple's only exploring the possibility of moving away from Samsung and haven't actually committed to do so, keeping Samsung in the dark may actually hurt Apple. Chip fabs can take years to plan and build and if Apple's mixed messages keeps Samsung from investing in new fabs, if Apple turns out to still be with Samsung in two years after-all, they may find themselves short on production capacity. It'll be interesting to see how Apple tries to diversify while keeping Samsung viable as a primary producer.
  • Reply 3 of 44
    sockrolidsockrolid Posts: 2,788member
    Re: "...TSMC could begin building quad-core 20-nanometer chips for Apple as soon as late 2013."

    The most interesting part of this rumor is the adjective "quad-core." It's quite possible that the 2014 iPhone and iPad will get that quad-core AX chip, most likely still based on the ARMv7 32-bit reference.

    But the 64-bit ARMv8 instruction set was released a year ago, and ARM announced their 64-bit Cortex-A53 and Cortex-A57 cores last month. It's only a matter of time before Apple switches consumer Macs to quad-core 64-bit ARM-based AX chips.

    Yes, there are marketing and legacy software issues to overcome. But the cost benefit to Apple is so huge that Apple needs to make the Intel-to-ARM transition on their consumer-grade Macs. Intel's CPU pricing is astronomical, and eliminating the Intel Tax would allow Apple to lower Mac prices (helping build market share) while maintaining their high margins.
  • Reply 4 of 44
    If Apple intends to switch away from Samsung for logic fabrication, it's obviously to their benefit to keep Samsung in the dark as long as possible. However, if Apple's only exploring the possibility of moving away from Samsung and haven't actually committed to do so, keeping Samsung in the dark may actually hurt Apple. Chip fabs can take years to plan and build and if Apple's mixed messages keeps Samsung from investing in new fabs, if Apple turns out to still be with Samsung in two years after-all, they may find themselves short on production capacity. It'll be interesting to see how Apple tries to diversify while keeping Samsung viable as a primary producer.

    I'm sure the Samsung board will be saying the same thing to themselves.

    We can mock them, antagonise them, copy their products.
    They are just bluffing.

    Apple NEED US !
  • Reply 5 of 44

    Quote:

    Originally Posted by Rot'nApple View Post



    "The growing reports could represent a concern on the part of Samsung that its chipmaking business will not grow as much as expected, with the potential loss of Apple as a major customer."

    But I thought their SG3 and Note and what not was doing extremely well, especially international markets that want cheap crap like the continent of Africa and Latin America? Why not use that "proposed" fabrication plant to build chips for their own items since they are so successful?

    /

    /


     


    Actually they are.  If you haven't yet heard, Samsung Electronic's profit is up almost 100% yoy, in large part, thx to GS III.  


    LOL!  You are confused. Samsung's largest markets are Europe and Asia, then followed by the American continents. Nokia's main customers basis is in Africa & Latin America.


     


    "..  Hit-or-miss technology industry publication DigiTimes, which is known for having a spotty track record with respect to anonymous sources,.. "


     


    LOL!!

  • Reply 6 of 44
    slurpyslurpy Posts: 5,152member


    What the **** is with Apple's stock??! There's absolutely no reason it should continue diving like this. Their fundamentals have never been this good. **** this shit. 

  • Reply 7 of 44


    Originally Posted by Slurpy View Post

    What the **** is with Apple's stock??!


     


    The election.

  • Reply 8 of 44

    Quote:

    Originally Posted by tooltalk View Post


     


    Actually they are.  If you haven't yet heard, Samsung Electronic's profit is up almost 100% yoy, in large part, thx to GS III.  


    LOL!  You are confused. Samsung's largest markets are Europe and Asia, then followed by the American continents. Nokia's main customers basis is in Africa & Latin America.


     


    "..  Hit-or-miss technology industry publication DigiTimes, which is known for having a spotty track record with respect to anonymous sources,.. "


     


    LOL!!



    ahahahahahah..


     


    lolololololol


     


    kakakakakaka


     


    Yes.. those less than 10 million (they sayd they "sold" 30million gs3) per quarter, much lesser actually, are the ones responsible for it.


     


    ahahahahahaha

  • Reply 9 of 44

    Quote:

    Originally Posted by Tallest Skil View Post


     


    The election.



     


    Quite possibly yes. Particularly since Obama didn't jump up and say that he was going to, if re-elected, devote himself to sticking it to companies like Apple and make them move all production back to the States so that they could single handedly create jobs for everyone etc. 


     


    Elections are the one thing worse than launch announcements to make Apple's stock fall. And both are well below the analysts and their hyped up sales estimates and the 'production difficulty' talk that they send out to cover up that they were giving out off base numbers to begin with

  • Reply 10 of 44

    Quote:

    Originally Posted by amoradala View Post





    I'm sure the Samsung board will be saying the same thing to themselves.

    We can mock them, antagonise them, copy their products.

    They are just bluffing.

    Apple NEED US !


     


    Then they are as dumb as Google. Apple was buying maps companies for 3 years so Google should have been working on an iOS app way back then. 


     


    Apple has been spreading out component production for ages. Samsung should see this coming and understand it. No smart company puts all eggs in one basket no matter how big and wonderful that basket is. Look at the Tsunami a while back and what it did to hard drive production because basically everyone was working out of one geographic area. All it would take is another Tsunami, an earthquake etc to destroy all or a huge part of Samsung's plants and Apple would be at a stand still because that's who is making all their stuff. Tim might not be a rock star cult leader personality like Steve but he was the COO and this kind of thing was his speciality and he knows this not so little truth better than most. The only reason why Samsung still has like 85-90% of the contracts is because there's no one else to do it. But Apple is working on that issue constantly. Eventually it will be more like Samsung 40% and the other 2-3 will cover the 60% between them

  • Reply 11 of 44
    slurpy wrote: »
    What the **** is with Apple's stock??!

    The election.

    More broadly, it is people moving out of equities into assets they are comfortable holding for longer periods of time without taking gains. Commercial real-estate should prosper. Many people don't want to need to hold Apple stock for the next five years until taxes go back down, and if they have any significant long-term gains they want to realize them this year.

    In January, we should see 30% plus gains, but not everybody wants to hold on that long, and an extra 10 points in taxes on the gain make it seem less attractive.
  • Reply 12 of 44


    It would be good for Apple to move away.


     


    As it is, with Samsung building screens and fabbing SoCs, Samsung knows exactly what the main components will be in the next phones/tablets so it knows early on what it has to do to compete.

  • Reply 13 of 44

    Quote:

    Originally Posted by tooltalk View Post


     


    Actually they are.  If you haven't yet heard, Samsung Electronic's profit is up almost 100% yoy, in large part, thx to GS III.  


    LOL!  You are confused. Samsung's largest markets are Europe and Asia, then followed by the American continents. Nokia's main customers basis is in Africa & Latin America.


     


    "..  Hit-or-miss technology industry publication DigiTimes, which is known for having a spotty track record with respect to anonymous sources,.. "


     


    LOL!!



     


    Hey Tool, haven't you heard? Their semiconductor business is down. Looks like their mobile business gains haven't been enough to make up for the loss of component sales to other customers.


     


    Surprised to see you back after I made of fool of you in the last two threads about this very subject.

  • Reply 14 of 44

    Quote:

    Originally Posted by EricTheHalfBee View Post


     


    Hey Tool, haven't you heard? Their semiconductor business is down. Looks like their mobile business gains haven't been enough to make up for the loss of component sales to other customers.


     


    Surprised to see you back after I made of fool of you in the last two threads about this very subject.



     


     


    Why?  Are you still bitter that I called out on your nonsensical BS and publicly humiliated you?  ROLF!  Man, you iLosers have a bit too much time.. 

  • Reply 15 of 44

    Quote:

    Originally Posted by pedromartins View Post


     



     


    I guess, I should expect TS to remove this post as well?

  • Reply 16 of 44


    Originally Posted by tooltalk View Post

    I guess, I should expect TS to remove this post as well?


     


    I don't see any anti-Apple user hate in there.

  • Reply 17 of 44


    You know they say don't fix what's not broken.  I think Apple is making a big mistake here.  We've all loved our iPhones and iPads of every generation and the chips that ran them were ALL made by Samsung.  They've done good work for Apple and we've all been the benefactors of their quality.


     


    Now changing vendors is a big risk and doing so just because you're trying to hurt your "competitor" can be a double-edged sword.  Just look at the Apple Maps fiasco with Google.  Who came out looking good and who has lost 20% of their stock price or US$140 BILLION off their market cap?


     


    Apple would need to win 139 more lawsuits against Samsung to make up for this loss.


     


    What's worse is that like getting rid of Google Maps, Apple is showing it cares less about the user experience and providing the best quality and services for their customers, and more about their bottom line.


     


    This isn't the Apple that people connected so strongly with and which let it become the biggest and most valuable company in the world.  That Apple bit its lip and worked with competitors if it meant providing the best product for its customers, even if it meant less profits.


     


    Samsung is the best chip manufacturer in the world.  That's why everyone uses them, and that's why Apple used them.  It was about the quality.  Now it's a big unknown.


     


    The sad thing is Apple and Samsung in the past have always been able to separate that client-vendor manufacturing relationship and the consumer electronics competitor relationship.


     


    A company like Samsung is so big that those divisions probably have very little to do with each other.  If anything, the Samsung manufacturing division probably treats that Samsung consumer electronics division as just another "client".


     


    The fact is, in technology, you HAVE to be able to work with your competitors. That's how to get the best quality and that's how you get the lowest costs.


     


    Apple seems to be experiencing the classic case of getting "too big for your britches" and it's going to hurt them in the long run.


     


    Another tragedy in all this is that Samsung actually has a manufacturing plant in TEXAS.  That's right.  The chips it made for Apple were largely MADE IN THE USA.  How's that for irony?


     


    Give that Apple outsources all the assembly of its products to CHINA, having Samsung make their chips was actually one of the few ways AMERICAN WORKERS actually benefited by Apple's success.  Apple giving Samsung their chip business meant AMERICAN JOBS.


     


    It was always nice to know that Americans were involved in the manufacture of Apple products even though they were hired by an overseas ASIAN company.


     


    Now with Apple using Taiwan Semiconductor Manufacturing Co. instead, all those AMERICAN JOBS will now be SHIPPED OVER to ASIA along with all the assembling jobs that are in CHINA. 


     


    Overall, this is worrying news for Apple consumers, not knowing if the quality of Apple products will take a hit, and even WORSE NEWS for American workers.

  • Reply 18 of 44

    You know they say don't fix what's not broken.  I think Apple is making a big mistake here.  We've all loved our iPhones and iPads of every generation and the chips that ran them were ALL made by Samsung.  They've done good work for Apple and we've all been the benefactors of their quality.


     


    Now changing vendors is a big risk and doing so just because you're trying to hurt your "competitor" can be a double-edged sword.  Just look at the Apple Maps fiasco with Google.  Who came out looking good and who has lost 20% of their stock price or US$140 BILLION off their market cap?


     


    Apple would need to win 139 more lawsuits against Samsung to make up for this loss.


     


    What's worse is that like getting rid of Google Maps, Apple is showing it cares less about the user experience and providing the best quality and services for their customers, and more about their bottom line.


     


    This isn't the Apple that people connected so strongly with and which let it become the biggest and most valuable company in the world.  That Apple bit its lip and worked with competitors if it meant providing the best product for its customers, even if it meant less profits.


     


    Samsung is the best chip manufacturer in the world.  That's why everyone uses them, and that's why Apple used them.  It was about the quality.  Now it's a big unknown.


     


    The sad thing is Apple and Samsung in the past have always been able to separate that client-vendor manufacturing relationship and the consumer electronics competitor relationship.


     


    A company like Samsung is so big that those divisions probably have very little to do with each other.  If anything, the Samsung manufacturing division probably treats that Samsung consumer electronics division as just another "client".


     


    The fact is, in technology, you HAVE to be able to work with your competitors. That's how to get the best quality and that's how you get the lowest costs.


     


    Apple seems to be experiencing the classic case of getting "too big for your britches" and it's going to hurt them in the long run.


     


    Another tragedy in all this is that Samsung actually has a manufacturing plant in TEXAS.  That's right.  The chips it made for Apple were largely MADE IN THE USA.  How's that for irony?


     


    Give that Apple outsources all the assembly of its products to CHINA, having Samsung make their chips was actually one of the few ways AMERICAN WORKERS actually benefited by Apple's success.  Apple giving Samsung their chip business meant AMERICAN JOBS.


     


    It was always nice to know that Americans were involved in the manufacture of Apple products even though they were hired by an overseas ASIAN company.


     


    Now with Apple using Taiwan Semiconductor Manufacturing Co. instead, all those AMERICAN JOBS will now be SHIPPED OVER to ASIA along with all the assembling jobs that are in CHINA. 


     


    Overall, this is worrying news for Apple consumers, not knowing if the quality of Apple products will take a hit, and even WORSE NEWS for American workers.

  • Reply 19 of 44
    cnocbuicnocbui Posts: 3,613member

    Quote:

    Originally Posted by Snowdog65 View Post


    It would be good for Apple to move away.


     


    As it is, with Samsung building screens and fabbing SoCs, Samsung knows exactly what the main components will be in the next phones/tablets so it knows early on what it has to do to compete.





    You tell em.  Sheesh, without Apple's superior and cutting edge manufacturing know-how and process related patents, Samsung would only know how to make refrigerators.

  • Reply 20 of 44

    Quote:

    Originally Posted by cnocbui View Post




    You tell em.  Sheesh, without Apple's superior and cutting edge manufacturing know-how and process related patents, Samsung would only know how to make refrigerators.



     


    That was either a comprehension or a sarcasm fail.


     


    I wasn't implying Samsung learned how to build tablets because of Apple, just that Samsung (Apples number one competitor in Phones/Tablets), gets a very early heads up on the exact specs of the next Apple phone/tablet .


     


    It isn't helpful to give this information to your main competitor months before every single product launch.

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