Apple Is Shifting Away from Samsung

Published:2011/5/2 22:28:00 Author:Amy From:SeekIC

Apple once had good cooperation relationship with Samsung. However, the two enterprises now are more like fierce rivals in the market of PC, mobile phone and tablet PC markets. We believe that the patent lawsuit is the major reason for this falling-out. As a result, we can estimate that Samsung will lose a big mount of sales.

In 2010, it is believed that Apple occupied 17 percent revenue of Samsung’s semiconductor. A huge amount of DRAM, NAND flash and other components were bought from Samsung by Apple. And Samsung is making the Apple-designed A4 and A5 processors based on foundry.

According to the new report wrote by Gus Richard, an analyst of Piper Jaffray & Co., Apple is seeking new silicon suppliers elsewhere. It can be seen from the sign of recent patent lawsuit between the two companies.

In the report of Wall Street Journal, Apple recently sued South Korea’s Samsung Electronics for patent infringement suit. Apple claimed that Samsung copied look and feel of its iPhones and iPads in its own smart phone and media tablet offering.

It is very obvious that Apple is planning to seek new cooperators to shift away from Samsung. With regard to memory, it is believed that Apple has started to spare no efforts to set up cooperation relationship with Elpida. However, it may take years for shifting suppliers. It is also expected that TSMC will start getting revenue from Apple in the fourth quarter of this year.

According to the analyst, Intel Corp. is planning to pursue Apple’s foundry business as well. Apple’s shifting may have huge impact on Samsung. In the first quarter of 2011, the sales of Samsung reached 36.99 trillion won ($34.6 billion) with increase by 7 percent year on year based on consolidated foundation. For this quarter, the company announced consolidated net income of 2.78 trillion won ($2.6 billion) which reduced by 30 percent year by year, due to decrease in DRAMs in some degree.

Many chip suppliers are pursuing for Apple’s business. There are good reasons. As we known, Apple is the largest client for semiconductors in the world. The semiconductor demand of Apple can be expected to reach roughly $20 billion this year, which is 6 percent of entire semiconductor demand including NAND flash, DRAM and leading edge logic. The revenue is expected to reach $14 billion with roughly 70% of Apple’s chip demand. The related integrated circuit is MB4104.

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