With Samsung and Apple buddies again, other tech firms should be nervous


Last August, Apple CEO Tim Cook decided to stop the bloodshed and started to initiate peace efforts with Samsung. The two had been going at each other with patent infringement suits that made the first page of major newspapers. Now, both tech titans are teaming up on certain components which will take business away from the competition.

According to Bloomberg, Samsung will be responsible for most of the Apple A9 chips that will be found in the next iteration of the iPhone. We've gone back and forth on this with some swearing that TSMC will get the A9 business and others insisting that the chip will be coming out of a Samsung factory. According to analyst Ming-Chi Kuo from KGI Securities, TSMC will get 30% of the business which could leave Samsung with the balance. Last year, with Apple and Samsung on the outs, TSMC was responsible for the Apple A8 chip.

A third manufacturer that has been mentioned this year, Global Foundries, has a yield of 30%, well under the 50% required for mass production. With Apple and Samsung working together, the latter has been showing improvement in its Q1 component sales. Samsung is optimistic enough about the future of the business to expand its chip making capacity. On the other hand, TSMC has announced a cutback in its spending.

Another company that is feeling the financial heat from Apple and Samsung's new found love for each other is SanDisk. The latter produces chips for mobile devices like the Apple iPhone and Apple iPad. While Apple was once SanDisk's largest customer, accounting for 19% of its revenue, those days are apparently gone. On April 15th, SanDisk said that it expected to report lower than expected sales for the year as its loses customers for its chips. Apple would certainly be on that list.
 
For Samsung, its resurgence in chip sales came at a perfect time. 2014 was a poor year for the company's smartphone business as it dropped from contributing 75% of Sammy's profits in the first quarter of 2014 to 37% by the fourth quarter of last year. Meanwhile, chip profits went from accounting for 20% of the company's profits in the third quarter of 2013 to contributing 55% of the profits a year later. Since then, Samsung's chip business has been outperforming its phone business. Although that might change with the success of the Samsung Galaxy S6 and Samsung Galaxy S6 edge, it doesn't take away from the fact that Samsung is growing its semiconductor profits.

Together, Samsung and Apple control 40% of the smartphone market. With Apple turning back to Samsung for its component needs, and Samsung using its home grown chips for its flagship phones (a practice that will continue with the Samsung Galaxy Note 5), there could be dark days ahead for more chip makers that once relied on Apple and Samsung for business. Besides TSMC and SanDisk, Qualcomm is another name that might belong on that list.

But in a strange twist, the San Diego based Qualcomm, which had been using TSMC to produce some of is chips, could be relying on Samsung's 14nm FinFET process for the Snapdragon 820 chipset. Using its cutting edge manufacturing technique, Samsung is able to get a higher yield and produce a superior product. That is one reason why Apple is turning to Samsung and away from TSMC for the A9.

source: Bloomberg

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101 Comments

1. Kruze

Posts: 1285; Member since: Dec 30, 2014

Now, I know why Apple didn't sue Samsung for taking some design inspiration from the iPhone 6. It's because of this, they made a deal in the first place. Apple: You help us make our chipset, you can have some of our design for your new design. Samsung: Deal.

4. gaming64 unregistered

Forst time I heard this. Comment of the day!

5. kryme

Posts: 469; Member since: Oct 24, 2013

r u serious... What exactly did copy from iPhone 6.... U talking about the placement of speak... Apple don't own that... What else? Rounded edge.. Samsung had that years ago... Now s6 and s6 edge is prettier than any iPhone apple ever design...

11. Kruze

Posts: 1285; Member since: Dec 30, 2014

Xiaomi did something similar to what Samsung did. What did people said about Xiaomi? "Oh, cheap China crap." "Xiaomi copycat." "Xiaomi makes Apple clones." I already knew that there will be some comment similar like yours after posting my comment. What I meant by "Samsung taking some design inspiration from the iPhone 6" is the frame of the S6 and yes, the speaker placement. This just proves that anything Samsung does will get defended by people. It's already a fact here, the tech community has shown it's true colors. Don't get me wrong, I like the S6 and Edge, but I just don't like the way people react to what a popular major company does and what a popular Chinese company does. They're doing the similar way from each other, but get the different reaction from people.

20. stealthd unregistered

Funny how you pick minuscule features and ignore the obvious ones like front-and-back glass, chamfered edges, anodized aluminum sides. There's things you can legally copy and things you can't legally copy, Samsung just tries to tip-toe up to that line as closely as possible. The only people copying more features from iPhones are actual iPhone clone companies. It's just a fact. You can argue about whether it's ethically or legally wrong for them to do so, but you can't deny that they do it, it's so obvious.

28. seven7dust unregistered

in many ways the iphone 4 is the grand daddy of all modern smartphones like galaxy s6 , xperia z2 z3 , xiaomi mi4 etc.. stainless steel frame and glass front and back , it crazy that everyone is still using this design from 2010-2011 for their most premium flagships.

39. TheBiz

Posts: 232; Member since: Apr 13, 2015

agreed that was the last iphone ahead of all phones

79. cheetah2k

Posts: 2256; Member since: Jan 16, 2011

Lets not forget Sony did the front / rear glass as well and no one said a word. iFans are all fktards

99. seven7dust unregistered

cheap retorts is all fandroids can do when presented with truth that hurts, So which Sony phone had a stainless steel frame before 2010 , I'll wait for your comment but as usual just empty noise from a loser fandroid. infact pre-2010 was Sony Ericsson days and their build quality wasn't that great. Nokia always won that time.

8. willard12 unregistered

Because Samsung has been making the chipset before and during the litigation there may be another reason for not suing for what you believe is Apple's design. http://www.phonearena.com/phones/Samsung-ATIV-S_id7463/photos?image=37769

21. stealthd unregistered

You're joking right? That doesn't look similar to anything Apple has made at all.

23. tinnitus85 unregistered

The sides of that ATIV phone look pretty similar to the iphone 6 to me.

75. stealthd unregistered

They both have screen too, oh no Apple copied having a screen! One feature in common doesn't mean anything, certainly doesn't prove the original point. You have to use some amazing fanboy mental gymnastics to think Apple would look at that and say "we don't want to use the design, we don't want to use the same materials, but hey let's STEAL the shape of the sides" instead of the far more likely thought of "what if we took the designs we've already been using and added a rounded edge and made the glass curve with it".

36. AppleCultist

Posts: 335; Member since: Feb 18, 2015

There is no need to be dishonest. It looks very much like the iPhone 6.

70. stealthd unregistered

No need to be delusional, it doesn't. Amazing how fanboys will be shown a dozen ways Samsung copied Apple and they'll deny it, one similarity in an Apple product and suddenly they're the copycat.

76. tedkord

Posts: 17357; Member since: Jun 17, 2009

No more amazing than fanboys being shown dozens of ways Apple has copied and stolen and still deny it.

59. darkkjedii

Posts: 31045; Member since: Feb 05, 2011

That's their excuse, when told the s6 looks similar to the iPhone 6. Samsung&Apple copy each other...deal with it.

71. stealthd unregistered

You don't have to compromise, we know it's just Samsung doing the copying.

77. tedkord

Posts: 17357; Member since: Jun 17, 2009

You believe it, with fervor. But that's often the way with religion, blind belief in the face of evidence.

84. darkkjedii

Posts: 31045; Member since: Feb 05, 2011

Nope not a compromise at all. They both take design cues from each other, but the s6 is more iPhonesque than their other phones.

55. Salazzi

Posts: 537; Member since: Feb 17, 2014

If anything, it looks more like the iPhone 3G/3GS.

68. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

Reminds me of the the 4 & 4S. People here suffer from amnesia. Suddenly, having a camera protruding like a piece of star burst candy is ok; people here were very critical of the 6 when it came out. However, the 6's camera doesn't look as ugly and lumpy.

80. cheetah2k

Posts: 2256; Member since: Jan 16, 2011

Looks just like the iPhone 6.. Oh wait, and it was released well before the iPhone 6 too.. Whats that I hear? iFans start to cry

9. engineer-1701d unregistered

its because samsung owns apple has it by the pips and without samsung apple cant sell its phones having problems with others and nothing to sue over the only thing is the placement of the speaker and trust me samsung fans are not happy about that quad speakers we have asked for years small one in each cormer concept since gs4 the design is from the ativ s and apple knows if they went to court they would not win and it would be a counter suit.

46. ibend

Posts: 6747; Member since: Sep 30, 2014

still waiting front-faced stereo speaker on samsung flagship..

81. cheetah2k

Posts: 2256; Member since: Jan 16, 2011

Yeah, only Sony and HTC done this.. I guess Samsung figure most people will use external speakers, Bluetooth, or headphones

10. enthasuium

Posts: 150; Member since: Nov 21, 2013

what abt apple followed samsung with 2 flagship, 1 galaxy S Sized iphone 6, and another Galaxy note sized iphone 6 plus apple health kit - from 2 years old samsung health

12. Kruze

Posts: 1285; Member since: Dec 30, 2014

Everyone copies. Deal with it.

24. Pigro

Posts: 4; Member since: Apr 27, 2015

Most of these things you guys are talking about aren't copying but competing. I mean come on, saying apple copied the note 4 with the iPhone 6 plus is absurd. So I guess any company that makes a phablet is copying the note 4, according to an above comment.

19. Sauce5 unregistered

Samsung Health? LMAO that thing gave me more headaches and higher blood pressure than serving good for its actual purpose. Health Kit is leagues ahead of Samsungs or Androids health approach in every way.

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