We all knew it was coming. It was just a matter of time before Apple and Samsung’s tumultuous relationship would come to an end. The two tech giants have a symbiotic relationship, but when Apple won the U.S. patent infringement lawsuit against its “Frienemy” a few months ago, it must have been the proverbial last straw because it appears that the two are working hard to part ways.
Last week, we heard rumors from Piper Jaffray’s Gus Richard, who claimed that Apple is looking for new chip partners to take over for Samsung once their contract is up. Pointing to Taiwan Semiconductor Manufacturing Co. as Samsung’s replacement, Richard said the transition will be complete as early as next year. Today, Apple Insider is reporting that Samsung told the Korean Times that Apple will no longer use their technology for chip production.
Korean Times says that Apple has not collaborated with Samsung in developing the iPhone 5’s A6 processor, although the latter will continue to manufacture chips. “Samsung’s agreement with Apple is limited to manufacturing the A6 processors. Apple did all the design and we are just producing the chips on a foundry basis,’’ said the unnamed senior Samsung official.
Analyst Park Hyan of Tongyang Securities said that this parting of ways is a huge blow to Samsung’s pocketbook. “It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client,” he said.
Samsung makes chips for various technology companies around the world. The unnamed senior official told the Korean Times that there are three types of “chip clients.” Some companies want Samsung to handle everything, some want design and manufacturing help, and some only want manufacturing help. Apple was in the second category before, but now only wants Samsung to make the chips.
The official claims that Apple is “threatened by Samsung’s rapid rise,” but that the iPad maker can’t fully end its relationship with the chipmaker simply because they need each other. The official pointed out that Apple has already ordered more flash-type memory chips.
Samsung may take a huge blow by losing design rights to Apple’s processor chips, but the company still holds a lot of sway in the tech world. It also makes custom chips for Qualcomm, Nvidia, and Texas Instruments.