

Samsung hikes up prices on Apple






Source: Market Watch

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By quyeno on 11/12/2012 7:05:08 PM , Rating: 2
This was long time coming and good on Samsung for doing this. I think the main reason for the price hike is supply and demand and the other customer is Samsung Mobile. Samsung is increasingly selling more and more phones and tablets and will probably need those chips themselves, they can only make so many chips and if sales of their devices are increasing then they will need a bigger share of those chips hence those chips have become a lot more sought after.

Yes Apple does a gazillion dollars but all this isn't much good cos Apple have not f'cking clue how to operate a fab and will need to recruit engineers and start from teh ground up. If all goes well, they may have a fab up and running and producing chips within 3-4yrs and even then the yields may be crap. Also if Apple wishes to make the current chips then they would probably have to pay royalties to Samsung as those chips were designed by samsung (based on ARM licenses?..not sure about this). I would imagine this would be same if TSMC were to make those chips. (could someone clarify?) TSMC is a very advance chip maker but even then it would take them quite a while to fine tune the line to get decents yields. But also remember TSMC makes chips for a lot of clients and have only certain capacity. Switching from chip to another isn;t so straight forward and requires recalibration, etc..for the new chip and this takes time. This is all assuming that TSMC doesn't already have its books stacked with orders, if so Apple would have to wait a very long time. To put this into perspective how important Apple is to TSMC, a while back Apple offered to invest a billion dollars or so in TSMC but TSMC refused because they prefer to make chips for a portfolio of clients and being obliged to make chips for Apple isn't in their best interest.

As we all know Samsung Displays recently dropped Apple and that was their decision and this really is a set back for Apple cos LG planels are not as good quality, in place of Apple, Samsung Dispalys will be supplying Amazon and more likely increasing supply to Samsung Mobile to meet demand. So even though it seems Samsung has 'lost' a customer, in fact they are probably in a better position as they can focus on meeting the increasing demand for their own devices. Who knows the Kindle may end up using more Samsung silicon in future.

It's great Samsung has done this, because it shows to other existing Apple suppliers that they can increase their prices and Apple will/may have to pay. No company will ever take a hit in their bottom line just to satisfy Apple regardless how much Apple buys and since Apple is a device manufacturer, they will always be at the mercy of their component suppliers.

