Samsung broadens search for chip buyers after Apple withdrawal

Samsung broadens search for chip buyers after Apple withdrawal

Summary: Samsung is looking to break into the Chinese market by supplying chips as Apple begins to loosen its dependence on the rival firm.

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TOPICS: Samsung, Apple, Mobility
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According to reports, Samsung is seeking new allies in the tech industry by tapping emerging markets in order to sell its mobile processing chips.

samsung apple new clients chip ap processing china developing emerging markets

The smartphone and mobile processor manufacturer is considering a shift in to the Chinese and developing markets to combat future shortfalls as Apple turns to alternative sources for chips, reports Reuters.

Reports have suggested that the Cupertino giant has not only moved some of its supply chain -- silicon production, specifically -- to Taiwan Semiconductor Manufacturing Company (TSMC), but also that the iPad and iPhone maker is slowly lessening its reliance on Samsung for mobile processing chips after Samsung hiked up its prices by 20 percent.

The South Korean firm's mobile processors, or application processors (APs) currently power its own range of Galaxy mobile devices and Apple's iPhone and iPad tablet range. However, as the relationship between the two tech giants continues to become strained and the companies continue their global battles over patent infringement in courts worldwide, the danger of Apple pulling out of using its rival's APs could result in a steep revenue drop for Samsung.

Goldman Sachs estimates that Samsung's sales of AP chips will rise to 9.3 trillion won ($8.8 billion) in 2013. However, if Apple goes ahead and shifts 30 percent of its business away in 2014, then this could decline to a dismal 2.5 trillion won.

Stephen Woo, president of Samsung's System LSI business told the publication:

"As there are just two smartphone makers that are doing really well, chipmakers supplying them have grown in tandem. So we plan to bolster our relationship with those key customers. (We) should diversify our customer base and are making such efforts already, adding some Chinese customers."

Samsung recently invested a further $3.9 billion in an Austin., TX chip-making plant to cope with the increase in demand for its products due to the rising popularity of smartphones and tablets worldwide. Samsung's total investment in the plant is now over $13 billion since the plant went into operation in 1996.

Topics: Samsung, Apple, Mobility

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7 comments
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  • Up the garden path.

    Sorry Charlie, but you are slightly leading your readers up the Cupertino garden path.

    As yet we have zero confirmation that Apple has any non Samsung SOC's in its phone and tablet devices. They are all Samsung.

    But yes you are right, they will obviously want to sell to the likes of ZTE and Huawei of China.
    In fact they'd even sell to Britain if only for it being just light Pi in the sky.
    albionstreet
  • Also a lesser problem for Samsung............

    The other thing to note is that Samsung, being committed to Apple already buy a lot of chips in such as the NovaThor.

    That makes them flexible enough to ensure that if APple do cease buying they can move more in-house with their massive smartphone range.
    albionstreet
  • Also a lesser problem for Samsung............

    The other thing to note is that Samsung, being committed to Apple already buy a lot of chips in such as the NovaThor.

    That makes them flexible enough to ensure that if APple do cease buying they can move more in-house with their massive smartphone range.
    albionstreet
  • Samsung/ Apple

    If Apple does drop Samsung then they won't have ANY reason to play nice with others. Right now the gloves are still on some what. As a second thought, what happens when the big wave of users have their phones? Yes there are still a lot of folks who want one who haven't gotten one yet. Once that gap is filled then the demand will slow a lot, it won't cease, but it will be to replace or upgrade a demand, not fill an empty spot. This is a long term question I know, but it's not just an impossible one. A lot of the demand will shrink.
    garyfizer@...
    • What makes you think demand will slow?

      With over 6 billion people in the world and third world countries getting more and more connected, shouldn't it be the other way around?
      guiri
  • Android Will More Than Fill The Gap

    Sales of Android devices are growing so fast that I doubt they will suffer a shortfall in sales for long, if at all.

    And if Apple is forced to switch to a supplier who was not their first choice, who perhaps cannot match the price or quality that Samsung offers, well ... the fallout from that will be interesting to observe, won't it?
    ldo17
    • Apple was not forced to switch

      they made the decision themselves. Are you honestly that delusional that you think Apple would choose to switch to a supplier that cost more yet has lower quality? Come on man, use your brain not your bias when posting.
      non-biased