Samsung remains primary Apple supplier through 2014 despite deal with TSMC

June 28, 2013
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Word surfaced back in April that Apple distancing itself from fierce competitor Samsung, forming a partnership with Taiwan Semiconductor Manufacturing Co. Those plans didn't pan out immediately, however, because the Taiwanese company - called TSMC - failed to make chips that were up to Apple's various standards. Today TSMC announced that it has ironed out the issues and officially entered into a deal with Apple, but through the next year Samsung will remain the company's main supplier.

As Samsung grew to be a large competitor against Apple - eventually shipping out more smartphones globally than iPhones - Apple began taking steps to distance itself from the company, calling such moves "risk diversification" and other terms. The reality is that Apple still very heavily depends on Samsung for some of its hardware, and that distancing itself from the Korean company has proved slow.

Both the companies have engaged in fierce back-and-forth legal battles over patents, adding further tension to the symbiotic relationship they share. Sources told The Wall Street Journal that executives at Apple feel that by depending on Samsung, the company is inherently limited in its "ability to controls its destiny", due in part to limited negotiation ability and branching out into other technologies.

One former Apple executive in particular reportedly said that the notion of taking all the work and time that Apple has spent with Samsung and starting with a new supplier from scratch is "daunting." As well, Samsung is one of the top suppliers for high-end components, and finding an alternative that can meet its needs is proving difficult, as the delays with TSMC have shown.

Although Apple relies on Samsung for microprocessors for its slates and iPhones, it has moved away from using the manufacturer's displays on nearly all of its devices, with only some of the newer iPads' screens coming from the Korean company.

SOURCE: The Wall Street Journal


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