Apple had been looking for another supplier to provide them chips for its iPads and iPhones yet remained dependent to Samsung.
Wall Street reported that Apple Inc. had finally signed a deal this month with Taiwan Semiconductor Manufacturing Co. to produce chips for them for 2014. The information came from the officials of the manufacturer. There had been delays for the two to close the deal due to glitches that Apple had identified while testing the chips. The manufacturer had to revamp it time after time for it to pass Apple’s speed and power standards.
However, despite this new team up, one of Apple executives stated that Samsung will still become their major supplier of processors and memory chips. Awkward as it seems, Apple and Samsung needed to separate their business issues for another deal. Both company refused to give comments if this report is true.
Well, these companies had an established partnership which goes back to 10 years ago before Samsung decided to venture on the smartphone industry. Unfortunately, Samsung had beaten Apple in the past year in the production of units. Apple executives had been looking for another supplier to replace Samsung because they would like to cut their dependence from their rival. This makes sense because why would you want to make business with someone you have been countersuing.
Apple had already started trimming down their dependence by not getting screens from Samsung and also started buying memory chips from other suppliers. However, their microprocessor which is the main component of their iPads and iPhones are still from Samsung.
Apple has no choice because Samsung is still the world’s biggest maker of the processors, memory chips and high-resolution screens that can pass Apple’s standards right on.
Why would Samsung not want to cut business with Apple? Analysts say that it’s purely how businesses work. Apple is their major buyer and losing the iPad maker means losing revenue. In fact, the supply ordered by Apple from Samsung last year was worth $10 billion according to Mark Newman, an analyst at Sanford Bernstein in Hong Kong.
