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Apple to Inflict Billions of Dollars' Worth of Pain on Samsung

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Back in mid-July news broke that Samsung would regain some of Apple's business for the A9 2015 chip based on 14 nano technology. The report even claimed that there was a signed agreement securing the deal. Two months later and DigiTimes is now reporting that Samsung is "eager" to snatch 14nm A9 orders from Apple. So apparently, Samsung has no such signed agreement which is going to mark a painful loss. Updated 9.16.13 6PM PST


The DigiTimes report went as far as claiming that Apple has informed Samsung it won't be placing order with them for the 20nm A8 chip.

 

Apple remains Samsung's biggest foundry customer. Therefore, losing the opportunity of supplying A8 chips to Apple may result in some idle capacity in 2014. According to the Wall Street Journal, "Apple's component orders from Samsung were set to hit around $10 billion last year, says Mark Newman, an analyst at Sanford Bernstein in Hong Kong."

 

While it's been rumored that Apple has been financing the construction of a multibillion dollar chip foundry with TSMC, a report a year ago made it clear that TSMC rejected such an offer. Though if Apple wanted to accelerate their switch to TSMC so as to inflict the maximum pain on Samsung, then anything is possible.

 

Apple's plans to accelerate their switch to TSMC may be linked to their "significant" investment in United Microelectronics Corporation, which hold several key patents and future capacity to produce future Apple SoCs. Today, TSMC hold the capacity that Apple needs but lacks the flexibility it wants. Now Apple has the ability to secure needed capacity to power next generation iPhones, iPads and likely wearables in the coming years.

 

At the end of the day, there have been countless rumors of Samsung regaining Apple's chip business. Yet the latest one from DigiTimes this week which indicated that Apple officially informed Samsung that they're not retaining their chip business in 2014 rings true.

 

(Updated information) This latest news comes on the back of news that broke in Europe last week that the European Union regulators have told Samsung Electronics to offer more concessions to settle EU charges that its use of patent lawsuits against rival Apple breached antitrust rules after a first offer fell short. If Samsung fails to allay the European Commission's concerns, it could face a fine of as much as $18.3 billion or 10 percent of its 2012 revenues.

 

The part that I like most is that it's going to be painful for Samsung who is a copycat thorn in Apple's side. For many in the Apple community, the infliction of such pain on Samsung can't come quick enough.  

 

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Comments

In context, that statement you quote wasn't about stealing Intellectual Property.

On page 396 of Walter Isaacson's Biography of Steve Jobs we read Steve Jobs' view on intellectual property as follows:

"From the earliest days at Apple, I realized that we thrived when we create intellectual property. If people copied or stole our software, we'd be out of business. If it weren't protected, there'd be no incentive for us to make software or protect designs. If Protection of intellectual property begins to disappear, creative companies will disappear or never get started. But there's a simpler reason: It's wrong to steal. It hurts other people. And it hurts your own character."

Steve would be proud. Apple seems to be getting its Mojo back. Looks like Mr. Cook and Mr. Ives have been having a conversation with Austin powers against evil. Bravo, I can't wait to see what's next...

good artist copy great artist steal.

I guess people who love innovation, should detest the Samsung way. Boycott Samsung products. I bought two LG TVs, 1 LG refrigerator, and 1 LG washing machine. Samsung had similar products too (similarly priced), but I don't buy or advocate Samsung anymore. Can you believe it they've even tried copying Apple's keynotes?? :-)

Someone said Digital Karma. I truly believe the likes of Samsung only deserve to die.. A painful death.

Apple isn't even close to inflicting enough pain on Samsung. $10 billion almost amounts to nothing. Samsung pretty much stole about $200 billion from Apple in market cap as Samsung snatched the smartphone market right out of Apple's grasp.

Apple shouldn't be doing any business with Samsung or Samsung will just steal whatever designs Apple makes.

I have no issue with Apple trying to inflict a world of hurt on Samsung so long as it doesn't hurt Apple in the process (ie: not able to source enough components).

digital karma

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