Apple purchasing flash memory from Japan to reduce reliance on Samsung
Apple is increasing purchases of flash memory from Japanese suppliers in an effort to scale back its dependance on Samsung for components, as the two companies continue their legal dispute, a new report claims.
DigiTimes on Thursday cited industry sources as saying that Apple has tapped Toshiba and Elpida Memory for orders of DRAM and NAND flash.
"Apple has moved to reduce its reliance on memory supplies from Samsung Electronics, the sources claimed," the report read. "The vendor has procured more NAND flash parts from Toshiba, and mobile RAM from Elpida, the sources indicated."
The tipsters also suggested that the ongoing legal dispute between Apple and Samsung has been "key to encouraging" Apple to broaden its supplier base. According to the report, the Korean electronics giant has been the largest component supplier for Apple's products in the past.
Last week, reports emerged that Apple had signed a foundry agreement with Taiwan Semiconductor Manufacturing Co. to manufacture the next two generations of Apple processors. The deal has been viewed as a significant blow to Samsung, which was contracted to produce the A4 and A5 chips used to power Apple's iOS devices.
Apple is slated to be Samsung's largest customer this year with a projected $7.8 billion in parts, up from $5.7 billion in 2010. The company has become the world's largest consumer of memory chips in recent years as it incorporated flash storage into its products.
In 2005, Apple revealed that it had reached agreements with several flash suppliers, including Samsung, to pre-pay more than $1 billion to guarantee flash shipments through 2010. Earlier this year, then COO Tim Cook called the deal a "fantastic use of Apple's cash."
For its part, Samsung currently boasts a more than 40 percent share of the worldwide DRAM market and a 30 percent share of NAND flash production.
The disagreement between the two companies has heightened in recent months. According to Samsung executives speaking on condition of anonymity, the company is already planning to target the as-yet-unannounced iPhone 5 with patent infringement suits when it arrives in Korea. Another recent report said Samsung will also pursue legal action against Apple's next-generation handset in Europe.
Recent gains made by Apple in Australia have prompted Samsung to fight back with a countersuit against the iPhone and iPad. Apple also won a permanent ban on the Galaxy Tab 10.1 in Germany earlier this month after a court ruled that Samsung's tablet looks too similar to the iPad 2.
DigiTimes on Thursday cited industry sources as saying that Apple has tapped Toshiba and Elpida Memory for orders of DRAM and NAND flash.
"Apple has moved to reduce its reliance on memory supplies from Samsung Electronics, the sources claimed," the report read. "The vendor has procured more NAND flash parts from Toshiba, and mobile RAM from Elpida, the sources indicated."
The tipsters also suggested that the ongoing legal dispute between Apple and Samsung has been "key to encouraging" Apple to broaden its supplier base. According to the report, the Korean electronics giant has been the largest component supplier for Apple's products in the past.
Last week, reports emerged that Apple had signed a foundry agreement with Taiwan Semiconductor Manufacturing Co. to manufacture the next two generations of Apple processors. The deal has been viewed as a significant blow to Samsung, which was contracted to produce the A4 and A5 chips used to power Apple's iOS devices.
Apple is slated to be Samsung's largest customer this year with a projected $7.8 billion in parts, up from $5.7 billion in 2010. The company has become the world's largest consumer of memory chips in recent years as it incorporated flash storage into its products.
In 2005, Apple revealed that it had reached agreements with several flash suppliers, including Samsung, to pre-pay more than $1 billion to guarantee flash shipments through 2010. Earlier this year, then COO Tim Cook called the deal a "fantastic use of Apple's cash."
For its part, Samsung currently boasts a more than 40 percent share of the worldwide DRAM market and a 30 percent share of NAND flash production.
The disagreement between the two companies has heightened in recent months. According to Samsung executives speaking on condition of anonymity, the company is already planning to target the as-yet-unannounced iPhone 5 with patent infringement suits when it arrives in Korea. Another recent report said Samsung will also pursue legal action against Apple's next-generation handset in Europe.
Recent gains made by Apple in Australia have prompted Samsung to fight back with a countersuit against the iPhone and iPad. Apple also won a permanent ban on the Galaxy Tab 10.1 in Germany earlier this month after a court ruled that Samsung's tablet looks too similar to the iPad 2.
Comments
This is great news for consumers.
Especially if Samsung is forced to innovate, rather than imitate.
Another big loss is the technology transfer gained by producing the next generations of chips like the A5 and A6..... this will be obvious as the next generation of phones, tablets and even TV's come out.... always gonna hurt when you lose the massive buying power of AAPL.
About time... reminds me of that saying about not biting the hand that feeds you.
the one that goes "don't place your fingers between the teeth that are about to chew"? i love that one.
Cheers,
PhilBoogie
Please let this somehow lower the cost of SSDs.
I was wondering this the other day. I realise it is a completely different technology, but hard drives have increased in size/reduced in price per GB on a regular step-by-step basis, but SSDs barely seem to move. 256 GB SSDs have been out for several years now, but after an initial price fall-off, they still remain very expensive. Is there some sort of quiet cartel operating here?
I would rather pay more for Apple Products is Apple purchases memory from Japan. Thats if the price goes up because of the japanese memory. Samsung is too much of a competitor for Apple. Besides Samsung has a rep that I think Apple needs to stay away from. Samsung HArd drives are stupidly lame in reliance. Isn't LG a subsidiary of Samsung and didn't Apple discontinue its display screen reliance of LG because of reliability of the product?
Most people have no idea - none - whose memory is in their ithing.
Interesting business decision by Samsung: steal IP from your largest customer to hurt sales of the products you sell them parts for. Then sue your largest customer to block all sales of the products that you sell them parts for. Long term result: loss of largest customer.
Yeah, I don't get it either. Samsung is voluntarily trading a steady inflow of business that is almost guaranteed to bring in wads of stable revenue for years to come, to compete in a highly volatile, saturated market that is racing to the bottom, and where their primary customers have shown over and over again to have very low brand loyalty.
Samsung is really overplaying their hand here. They are betting the farm that they will be able to become the Android equivalent of what Apple is with the iPhone and iPad, even though margins on Android phones are razor thin, competition is fierce, and Samsung itself only has the hardware side of their product covered. I would be hugely surprised if their Android phone/tablet business is making them more money than they are making from the components Apple buys from them.
But they are making a big mistake. In Korea samsung is a very big fish in a small pond. Outside of Korea, samsung is an above average medium sized fish. But Apple is a new breed that appears to be a hybrid between a shark, a killer whale, and an attack submarine. Samsung is toast.
I was wondering this the other day. I realise it is a completely different technology, but hard drives have increased in size/reduced in price per GB on a regular step-by-step basis, but SSDs barely seem to move. 256 GB SSDs have been out for several years now, but after an initial price fall-off, they still remain very expensive. Is there some sort of quiet cartel operating here?
Unlikely. Rather, demand for SSDs and similar chips produced by the same companies has skyrocketed.
If supply increases faster than demand, prices drop. If demand increases in step with supply, then prices generally won't drop much, if at all.
Given the cost of a new chip manufacturing operation, it isn't surprising that supply has not been able to grow faster than demand.