Samsung's Exclusive Contract for iOS Device Chips Expiring in June as A7 for iPhone 6 Heads to TSMC?

rjohnstone said:

So much nonsense in this post... where to begin?
As for the fabs, that is the cost of doing business. Apple needed a dedicated production line, so they had to pay for it. Those fabs are of no use to Samsung once Apple's contract is over. They will have to be retooled for new production. That alone will cost billions.

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Thats the point. Instead of receiving billions from Apple for expanding their facilities, Samsung will have to invest billions in adapting to new conditions: where there are no billion dollar, multiyear, guaranteed orders from Apple. Thats one hit.

2. LG and Samsung have been pointing fingers at each other for years.
Old news.

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Old or not, you don't give competitors look inside your newest chips. They may not copy the design exactly but they will know how to compete with your forthcoming products. Now its ended.

3. Your lack of industry knowledge here is beyond obvious.
Samsung doesn't need or use Apple's R&D for their own chips.
The Exynos chip is proof of that.
Samsung sticks Qualcomm chips in their phones where the Exynos' radio is not compatible with the market the phone is being shipped too.
No Apple designs are ever used in Samsung's chips.

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You don't understand: its not that Apple design is closely copied by Samsung (jury will have its verdict on it); it is that you never should give hints of your plans to your largest competitor and its Samsung now. Enough of Schmidt sitting on Apple board and reading all Apple's strategy papers and enough of Samsung getting blueprints from Apple of its most important parts. Let them think themselves.

StoneJack said:

Old or not, you don't give competitors look inside your newest chips. They may not copy the design exactly but they will know how to compete with your forthcoming products. Now its ended.

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There's a lack of understanding here. Apple doesn't give them their designs. They give them their design output. Samsung can only see the type and location of transistors as it relates to floorplanning and ultimately fabbing. Apple isn't handing over schematics. They're not that much better positioned to learn from their design than some company who studies the die shots from someone like ChipWorks.

rjohnstone said:

Also, Samsung has never used any SOC that was purpose built for Apple.

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Not completely true. Intrinsity was acquired by Apple after they did the design that ended up being the A4 and Hummingbird SoCs for Apple and Samsung, respectively.

chrmjenkins said:

Not completely true. Intrinsity was acquired by Apple after they did the design that ended up being the A4 and Hummingbird SoCs for Apple and Samsung, respectively.

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True, but you and I both know the difference here.

what percentage of Samsung's chip business is consumed by Apple anyway, I am sure it is not as large as other MFG's use of their chips.

StoneJack said:

Thats the point. Instead of receiving billions from Apple for expanding their facilities, Samsung will have to invest billions in adapting to new conditions: where there are no billion dollar, multiyear, guaranteed orders from Apple. Thats one hit.

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Minor hit in the big picture. Samsung is already investing billions in it's own designs.

StoneJack said:

Old or not, you don't give competitors look inside your newest chips. They may not copy the design exactly but they will know how to compete with your forthcoming products. Now its ended.

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LOL... again. Understand how this business works.
Apple doesn't create magical chips. The whole goal is thinner, faster with less power used.
Every chip fab on the planet is working on that every day.
Apple's chip designs are not revolutionary, they're evolutionary.

StoneJack said:

You don't understand: its not that Apple design is closely copied by Samsung (jury will have its verdict on it); it is that you never should give hints of your plans to your largest competitor and its Samsung now. Enough of Schmidt sitting on Apple board and reading all Apple's strategy papers and enough of Samsung getting blueprints from Apple of its most important parts. Let them think themselves.

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Samsung never made exterior components for Apple.
I'd love to see how you can extrapolate the design of a device by only looking at a chip inside it.
Your comparison is irrelevant.

Eric Schmidt has never stolen or even been accused of stealing anything from Apple. Even Steve jobs had nothing but good things to say about Eric.

Take your tinfoil hat off and go into the sunlight at least once a day for a few minutes.
It really clears the head.

Wicked1 said:

what percentage of Samsung's chip business is consumed by Apple anyway, I am sure it is not as large as other MFG's use of their chips.

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Estimates were around 10% of Samsung's production capacity at their peak.

rjohnstone said:

LOL... again. Understand how this business works.
Apple doesn't create magical chips. The whole goal is thinner, faster with less power used.
Every chip fab on the planet is working on that every day.
Apple's chip designs are not revolutionary, they're evolutionary.

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You really don't understand it, don't you. No one is talking what is aim of chip plants in general. No one is talking about evolution either. My point is that multibilliion dollar orders from Apple helped Samsung expand their business. 10% of multibillion business is nothing small, its not 10% of your grocery store (and even then its big for that store).

And don't forget that Apple has been BIGGEST customer for Samsung. Now, if you think that losing your biggest customer is nothing, you clearly don't understand business at all. Financing that came with Apple: 2.1 billions dollars just in 1 year (2012). So you continue to say thats nothing?

Don't you know that losing your biggest customers hurts? Apple recently secured half the manufacturing output from Elpida, a struggling Japanese maker of dynamic random access memory chips. The move immediately wiped out $10 billion of Samsung’s market cap over fear of orders stoppage that http://www.idownloadblog.com/2012/08/07/apple-now-accounts-for-8-8-of-samsungs-revenue/

Samsung never made exterior components for Apple.
I'd love to see how you can extrapolate the design of a device by only looking at a chip inside it.
Your comparison is irrelevant.

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Who is talking about design of device?? Its about capabilities, its about inner knowledge of Apple technology, its about knowing in advance about Apple plans - because you get your orders and you can extrapolate demand projections and other necessary business information, like approximate costs of device and probable pricing. Even whats more important is that Samsung had multiyear contract, which means they could plan their expansion for years ahead and they had that huge financing deals. Thats my point and not evolution of Apple chips or an assertion that Samsung made some exterior parts for Apple, which I never said. Please re-read my original post.

Consultant said:

Hope this is true. Once Apple moves manufacturing of essential parts to other companies, Samsung will no longer have the benefit of figuring out Apple's iOS roadmap.

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It might also stop the two companies from conducting almost constant ongoing litigation, which is neither productive, shifts focus to the wrong areas, and benefits nobody.

Samsung has already planned for Apple leaving and begun shifting resources.

You are one of those who still buy into the RDF and think Apple is Samsung's lifeblood.
They wereone of Samsung's biggest customer at one point.
Biggest customer =/= largest share of production or revenue.
Apple currently accounts for only 8% of Samsung's profits in 2012 (approx. 2.2 billion dollars) and estimated to stay steady through 2013.