TSMC contracted to build A6X chips for Apple this quarter, pushing out Samsung

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  • Reply 21 of 33
    nhtnht Posts: 4,487member

    Quote:

    Originally Posted by Gazoobee View Post


    I also find it interesting that the party line on Apple moving it's chip business away from Samsung is that Samsung this year, is that Apple will only move 50% of it's business away and that Samsung will somehow find other orders to make up the difference.  When Apple removes the final 50% the next year, Samsung is predicted to be able to make up 47% of that as well.  All this is based on some wild assumptions and a bit of a hope and a prayer, but it's still being passed around as gospel in financial sectors.  


     


    I think it more likely that Samsung will lose 100%of Apple's business in a very short time frame (the shortest Apple can manage), and that it will be difficult for them to fill even half the volume.  It's not like Windows phones are taking off so well that there is some burgeoning new market, or hot new product to supply.  Which players are going to switch their business away from wherever they are now to fill Samsung's order sheet?  I don't see it.  



     


    1) Samsung is using more and more capacity internally.


    2) Qualcomm is perennially hurting for capacity and competing with Apple and others for fab capacity. 


    3) TI dropped out of the mobile processor market.


     


    I don't believe that Samsung will be left with overcapacity.  I do believe that they won't see the same level of growth and end up with stronger competitors as a result.  Still, it's a win for Samsung given that the handset market is the more profitable of the two.

  • Reply 22 of 33
    nhtnht Posts: 4,487member

    Quote:

    Originally Posted by Tallest Skil View Post


     


    This is truly meaningless. Suits about manufacturing are something Samsung cannot afford. No amount of money will bring back trust when a supplier has broken it.


     


    So you don't imagine that was covered when the contract was signed however many years ago? Terms don't magically change near the end, particularly since this wasn't really a concern back then.


     


    This is entirely different from any lawsuit they've had before. 



     


    The ability to cripple Apple for a couple of key quarters is probably worth any damages awarded and reputation hit if the situation warrants it.  It's simply a business decision.  The question is whether or not they can really cripple Apple or just annoy it with a short term hit.


     


    No one can say either way whether or not Samsung leadership believes the repercussions are worth the effect or how well they believe they can mitigate any negative outcome for themselves.


     


    Besides, have you never heard of the term "work to contract"?  Not all contracts are all that well written and it is rare that they cover everything.

  • Reply 23 of 33

    Quote:


    Originally Posted by Tallest Skil View Post


     


    Do you? 


     


    Would it move that quickly? I'd think they'd have longer terms.



     


    No... I don't know the terms and I stated as much. The way you spoke, though, it sounded as if you knew what they are.


     


    Longer terms? I doubt it. Samsung would probably want a minimum quantity written into the contract. How much would Apple be wiling to gamble? Cook doesn't seem like a gambling man.


     


    I'm thinking that it is possible that the terms of the contract may now be hurting Apple as Samsung works to contract rather than extending Apple any leniency and could be one other reason that Apple is looking for another supplier.

  • Reply 24 of 33


    Originally Posted by island hermit View Post

    No... I don't know the terms and I stated as much. The way you spoke, though, it sounded as if you knew what they are.


     


    Ah, I meant it as though I was supposing right alongside you, but if it didn't come out that way, apologies.





    Longer terms? I doubt it. Samsung would probably want a minimum quantity written into the contract. How much would Apple be wiling to gamble? Cook doesn't seem like a gambling man.



     


    Oh, I don't mean five years or anything crazy, but at least two, maybe three. Minimum could be approximated based on growth outlook of the devices in question, couldn't it? Yeah, the numbers would have to be watched closely to see any new trends, but would it need to be a yearly change? Apple's sales growth has been pretty predictable as of late.






    I'm thinking that it is possible that the terms of the contract may now be hurting Apple as Samsung works to contract rather than extending Apple any leniency…



     


    Oh! You're thinking they wouldn't give any sort of extra… what am I looking for… units beyond that for which they were contracted? Not even for (obviously) an additional fee? Interesting. You'd probably know better than I whether that's common or legal. I mean, yeah it's outside the realm of the contract so there wouldn't be any legal obligation to do it, but in the face of more money, you'd think they would.

  • Reply 25 of 33

    Quote:

    Originally Posted by Tallest Skil View Post


    Oh! You're thinking they wouldn't give any sort of extra… what am I looking for… units beyond that for which they were contracted? Not even for (obviously) an additional fee? Interesting. You'd probably know better than I whether that's common or legal. I mean, yeah it's outside the realm of the contract so there wouldn't be any legal obligation to do it, but in the face of more money, you'd think they would.



     


    Or it could mean that if Apple was to have a much better than expected month and needed Samsung to work overtime to produce enough units then Samsung might be able to turn around and say no... work to contract.


     


    True, money might seem like an incentive but Apple is also a competitor and Apple's loss lately seems to be Samsung's gain.

  • Reply 26 of 33
    addaboxaddabox Posts: 12,660member

    Quote:

    Originally Posted by DGNR8 View Post


    Before this is all said and done, Apple customers will feel the pain of the transition.


     


    Samsung will make this as painful as possible, they have nothing to lose by compromising Apples production volume.


     


    I have a feeling this will be a rough year for Apple with the transitions of suppliers and with the company still continue to find it's legs without Mr. Job's.


     


    I am sure I am not the only one to notice that Apple seems to have lost a bit of luster to it's shine.


     


    Product leaks prior to debut, extremely long leads time well past the holiday buying season after debut and in my opinion a drop in service quality I had come to expect from Apple. 


     


    I think Mr. Cook has a lot of issues to address before things get back to Apple normal.



     


    While Apple certainly has had its share of challenges over the last year or so, I think you're overstating the scope of their difficulties.  Supplier transitions are nothing new, and Apple has shown itself to be particularly adept at same-- consider the Intel transition, or various component swaps that you're not even aware of, since they were pulled off without incident.


     


    Product leaks are an inevitable consequence of a vastly expanded Apple production chain.  The days of tight secrecy were predicated on tiny market share and correspondingly low production runs.  It simply isn't possible to maintain that level of security across the modern Apple's vast manufacturing footprint.  It hasn't been possibly for a while, it won't be possible in the future, and that particular caveat regarding Apple should probably be retired as an unrealistic expectation.


     


    Products delays are nothing new and hardly a metric for returning Apple to "normal."  The fact that Apple makes products that are so popular they can sell all they make and more, even with the factories running day and night, should be cause for cheer, not alarm.


     


    I'm not sure what service quality issues you're experiencing.  I've had out of warranty products replaced outright after a visit to the genius at the Apple store, within the last six month.  I know there has been a bit of erosion in the customer satisfaction ratings, but those are likely to be as much about widely reported software missteps as any actual support failings.


     


    And yes, Maps was a real stumble.  That's the kind of thing that we might hope to see Cook address in the coming year, but he isn't a magician.  Sweating the details takes time, and details are what needs fixing on Maps.  In fact, it might be a good indication of a promising new direction for Apple, since one of Jobs' failings was an almost attention deficit restlessness, always ready to move on to the next big thing when the last thing needed work.  How many promising Apple products have been allowed to languish, after a splashy rollout?  Whatever happened to Aperture?  I mean, I know there continue to be updates, but for all the love it gets you might be forgiven for thinking Apple had discontinued it.  Where are we at with iWork?  The Mac Pro?  


     


    That's the kind of thing I look to Cook to improve:  continual iteration and improvement of existing (especially software) products, with Maps at the front of the line.  It isn't as sexy as rolling out the future, but it would make Apple a better, more reliable company.

  • Reply 27 of 33
    addaboxaddabox Posts: 12,660member

    Quote:

    Originally Posted by island hermit View Post




    ... and what does that contract say. Nobody knows. Terms of the contract could allow Samsung to work to rule with no overtime or no increased production.


     


    I do agree, though, that Apple could be opening up a bag of hurt if there is a transition to TSMC for its chips.


     


    As far as Samsung being sued... that threat doesn't seem to bother them.



     


    Patent and trademark litigation are different things entirely from breach of contract, with the former being a highly volatile crapshoot dependent on subjective readings of ambiguous design and functionality cues (not to mention a thicket of poorly written law), and the latter being pretty cut and dried.


     


    If Samsung has contractual obligations to deliver x amount of product (and why would we imagine that they don't? What kind of manufacturing supply contract doesn't stipulate those kind of numbers?) then failure to do so would be a clear breech of contract.  If Samsung tried to pull a fast one and claim reduced capacity for some trumped up reason, that would be subject to verification and pretty black and white compared to "rounded rectangles."

  • Reply 28 of 33

    Quote:

    Originally Posted by addabox View Post


     


    Patent and trademark litigation are different things entirely from breach of contract, with the former being a highly volatile crapshoot dependent on subjective readings of ambiguous design and functionality cues (not to mention a thicket of poorly written law), and the latter being pretty cut and dried.


     


    If Samsung has contractual obligations to deliver x amount of product (and why would we imagine that they don't? What kind of manufacturing supply contract doesn't stipulate those kind of numbers?) then failure to do so would be a clear breech of contract.  If Samsung tried to pull a fast one and claim reduced capacity for some trumped up reason, that would be subject to verification and pretty black and white compared to "rounded rectangles."





    I don't think I ever said otherwise.


     


    [...but, contractual obligations aren't as cut and dry as some would have you believe]

  • Reply 29 of 33
    addaboxaddabox Posts: 12,660member

    Quote:

    Originally Posted by island hermit View Post




    I don't think I ever said otherwise.


     


    [...but, contractual obligations aren't as cut and dry as some would have you believe]



     


    I was responding to the idea that Samsung isn't bothered by litigation, since that's an impression based the various trade-dress and patent battles being waged.  I don't think that has any bearing on their willingness to do things like brazenly breech manufacturing contracts as a market-share strategy, which would come under a lot more scrutiny (with potentially much heavier penalties) that even simple contract dispute (given the market share Samsung is currently commanding).


     


    And while contract law may have its ins and outs, compared to current patent, trade-dress, and copyright wars it's downright straightforward.

  • Reply 30 of 33
    wizard69wizard69 Posts: 12,827member
    realwarder wrote: »
    Until TSMC actually have a US fab, this is bad news for the drive to build in the USA.

    A drive that comes from irrational selfish people with no grip on reality. This is the Obama handout, give me mentality that seems to have cloaked this country in darkness. Apples primary concern right now is tying up with an ethical supplier. The how's, why's and where's can be dealt with later.

    It isn't Apples reason for existence to create jobs, jobs are rather the by product of creating great devices. If those jobs have to leave the country for awhile to avoid doing business with an unethical company then it is rational for Apple to do so. It is highly unlikely that they can get a full blown foundry up and running by 2014, so the rational thing to do is to start a transition at one of TSMC's other plants.
  • Reply 31 of 33
    wizard69wizard69 Posts: 12,827member
    Did someone forget their happy pill this morning?
    dgnr8 wrote: »
    Your response is as if Samsung is an honorable company.

    I do think they will fulfill their contract however whats to stop them making life hard for Apple and Apple customers.
    The fact that division in question is US based is one factor. Beyond that the last thing Samsung needs is to have a public perception that they are unreliable as a foundry.
    They can come up with delays, questionable product runs ect.
    Have you ever stopped to consider that they may be at full capacity already and that Apple needs to second source simply because one supplier won't be enough for next year. Don't forget that Apple has the potential to sell into the billions in China.
    We are not talking about two American companies that have to follow the same jurisdictions, just look at what Samsung does every time Apple releases a new product 6 months later Samsung has a knockoff.
    Err where do these chips come from?
    They have the protection of the Korean Government so this would be a long drawn out court battle not unlike the iPhone.

    I do not think Mr. Cook is looking for round two of legal action with Samsung rather I believe he would just like to separate from Samsung even it is a bit painful.
    Maybe maybe not. You need to look at this from the standpoint that Apple has been doubling or more shipments every year. You can't just double a semiconductor plant.
    So back to Samsung, why would you think they would be any less dishonest with Apple beginning to pull away large volume purchases in 2013.
    Because they would loose more than they would gain.
  • Reply 32 of 33
    sr2012sr2012 Posts: 896member
    “Resentment is like drinking poison and waiting for the other person to die.”
  • Reply 33 of 33
    ksecksec Posts: 1,564member


    LOL at some comments.


    It doesn't matter what Samsung do to make Apple's life hard. Any dirty tricks that comes out, even if they may never filter through to public media they are very likely to spread through out the business circle. Selling Production capacity and even engineering Fabs is relatively easy. Fixing Company reputation is hard.


     


    It also seems most of the comment have no idea how Fab industry works. Samsung lose if Fabs are sitting idle, and it is not just a small lost, but huge one. Apple contribute to ~ 40%+ of Samsung capacity. There isn't a SINGLE company on earth that can fill that capacity. ( Unless you take Intel and AMD in ) If Apple moved all of a sudden to TSMC, I will be shitting my pants if i were Samsung.


     


    But Luckily Apple dont like taking this risk, and TSMC isn't ready either, That is why the rumor only said iPad SoC. The iPhone SoC will probably still manufactured by Samsung. 

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