According to a new report from Asia today, an "Apple tsunami" is impacting on Samsung's logic chip division, cornering top management to implement contingency plans to find new clients as Apple moves to other sources.
In 2011, Samsung agreed with Apple to supply components until the end of 2014. Under the agreement, Samsung will manufacture Apple's logic chips to be used for the upcoming iPhone 5S and advanced iPad until the first half of next year.
According to IC Insights, a leading market research firm, Samsung reported $4.33 billion in revenue by supplying customized applications, last year, with Apple making up 89 percent of them or some $3.8 billion.
Mark Newman at Sanford C. Bernstein in Hong Kong said that going into 2014, Apple will start to use Taiwan's TSMC so Samsung needs to find alternative customers for their own processor chips
Industry sources state that Samsung is eyeing other customers such as Sony and NVIDIA, but the status with Amazon has not reached that level yet. Amazon is developing its own application processors for the core components of its popular Kindle tablets — it previously used OMAP-branded processors manufactured by Texas Instruments. Translation: There's no one yet that's going to fill the void due to Apple's exit.
Something tells me that Apple's exit for logic chips is really going to hurt Samsung this time around – and it's about time.
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