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Where Will Apple Get Flash Memory Now?

timothy posted about a year ago | from the stealing-american-jobs-by-jingo dept.

Businesses 245

An anonymous reader writes "EE Times examines whether Samsung could be about to control the equipment output of Apple by putting the Cupertino company on a rationed supply of NAND flash as the non-volatile memory goes into short supply in 2013. The analysis argues that Apple may need to put down billions of dollars of cash to fund a guaranteed NAND flash supply plan, something that Samsung did in the middle of the last decade."

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At the prices Apple charges for extra memory (5, Funny)

Anonymous Coward | about a year ago | (#43421997)

they could probably pay someone to assemble the bits by hand under an electron microscope.

Anobit? (0)

Anonymous Coward | about a year ago | (#43422021)

Didn't Apple buy Anobit? So why would they buy NAND from Samsung?

they bought Anobit but.... (3, Informative)

maroberts (15852) | about a year ago | (#43422045)

Anobit has no fab plant, so it doesn't solve the problem of not being able to get the actual components.

Re:they bought Anobit but.... (0)

Anonymous Coward | about a year ago | (#43422125)

One acronym: TSMC.

Re:they bought Anobit but.... (-1)

Anonymous Coward | about a year ago | (#43422203)

One acronym: TSMC.

What, Trolls Shill for M$ & Co?

Re:they bought Anobit but.... (0)

Anonymous Coward | about a year ago | (#43422391)

Can't tell if sarcastic or unable to Google/follow the semiconductor industry in the slightest but:

  http://en.wikipedia.org/wiki/TSMC

Re:they bought Anobit but.... (0)

Anonymous Coward | about a year ago | (#43422661)

TSMC is the world's largest chip fab.

Re:they bought Anobit but.... (0)

Anonymous Coward | about a year ago | (#43422439)

TSMC cannot produce the whole semiconductor needs of the planet. They currently work for several companies to produce ARM CPUs, GPUs, FPGAs...

They have a specific capacity.

Re:they bought Anobit but.... (2, Insightful)

NatasRevol (731260) | about a year ago | (#43422615)

Apple could probably put a small percentage of their capital into TSMC and double or triple their capacity.

Re:Anobit? (5, Informative)

Anonymous Coward | about a year ago | (#43422055)

Because Wikipedia: "Anobit Technologies, Ltd. is an Israeli fabless designer of flash memory controllers." For the reading impaired, this means that they design memory controllers, not memory chips, and they only design them, they don't make them.

Re:Anobit? (-1)

Anonymous Coward | about a year ago | (#43422275)

...an Israeli fabless designer...

That's too bad. We should be boycotting those bastards and the Saudi sons of bitches... It's time to starve them end the wars

Re:Anobit? (1)

Anonymous Coward | about a year ago | (#43422457)

Dont forget to stop driving vehicles or buying food delivered using saudi oil. Hipocrisy is a bitch.

Re:Anobit? (0, Flamebait)

Anonymous Coward | about a year ago | (#43422603)

Why? It's not the oil or the land itself that is bad, it's the filthy, unevolved, sand niggers that inhabit it that need to die.

The way you say it, it's like those dune coons MADE the fucking oil and stuck it into the ground, which is just stupid. You're not one of them worthless Habibs too, are you?

Re:Anobit? (1)

Anonymous Coward | about a year ago | (#43422637)

Animal Mother - is that you?!

Re:Anobit? (1)

Chrisq (894406) | about a year ago | (#43422067)

Didn't Apple buy Anobit? So why would they buy NAND from Samsung?

Do Anobit make actual flash memory or just flash controllers? I can't seem to find the information on Google

Re:Anobit? (1)

h4rr4r (612664) | about a year ago | (#43422095)

Niether. They design flash controllers, but don't have a fab.

Non story (2, Insightful)

Anonymous Coward | about a year ago | (#43422043)

Apple may need to put down billions of dollars of cash to fund a guaranteed NAND flash supply plan

..which wouldn't be a problem for them.. and given the way they've worked with processors and displays, is to be expected.

Re: Non story (0, Informative)

UnknowingFool (672806) | about a year ago | (#43422115)

Well the story assumes that Apple hasn't already secured their supply. This story from 2005 [macworld.com] reports how Apple made 5-year deals with 5 different manufacturers to secure their supply. The deals have since run out but it doesn't take a grand strategist to guess that Apple may have negotiated new deals. Remember Apple is very secretive so that may not announced to the world all their plans. Also, Apple has been known to front money to their suppliers in exchange for guaranteed supplies. Today they are sitting on billions in cash.

Re: Non story (4, Insightful)

jittles (1613415) | about a year ago | (#43422181)

Well the story assumes that Apple hasn't already secured their supply. This story from 2005 [macworld.com] reports how Apple made 5-year deals with 5 different manufacturers to secure their supply. The deals have since run out but it doesn't take a grand strategist to guess that Apple may have negotiated new deals. Remember Apple is very secretive so that may not announced to the world all their plans. Also, Apple has been known to front money to their suppliers in exchange for guaranteed supplies. Today they are sitting on billions in cash.

I doubt such a deal could remain secret due to SEC filings from Apple. Not to mention the fact that the suppliers will want to say "Look at us! We just got a billion dollars!" so that they may boost their stock prices. If we haven't heard about Apple making such a deal, then it probably hasn't happened. And it may not happen easily. Everyone is using flash storage now, and there is likely to be a lot of concern over supply. The big players may not want to make a deal with Apple to guarantee a supply so that they do not artificially limit the supply for their own products. Of course with a few extra billion, you could possibly increase your production significantly.

Re: Non story (1)

UnknowingFool (672806) | about a year ago | (#43422353)

Apple pre-paid which means they would have to account for it to their stockholders and the SEC. If they made an agreement on price and supply amount without negotiating upfront money, I don't think that they have to report it.

Re: Non story (5, Informative)

Anonymous Coward | about a year ago | (#43422233)

Well the story assumes that Apple hasn't already secured their supply. This story from 2005 [macworld.com] reports how Apple made 5-year deals with 5 different manufacturers to secure their supply. The deals have since run out but it doesn't take a grand strategist to guess that Apple may have negotiated new deals. Remember Apple is very secretive so that may not announced to the world all their plans. Also, Apple has been known to front money to their suppliers in exchange for guaranteed supplies. Today they are sitting on billions in cash.

Please rtf the original article. The deal with 5 different manufacturers is why Apple will find it difficult to source the supply in 2013. They schemed the manufacturers and always projected they needed way more than they purchased. This lead to oversupply in the market and lower prices. So the 5 year, 5 manufacturer deal fell off the cliff. Therefore Apple in 2013 will have to put up billions as opposed to 1.25 billion and they probably have to buy all of the nand they think they need. Not just project and then play one manufacturer against another. Therefore Apple will possibly pre-pay and possibly pre-pay much higher prices and will also need to buy it. They will probably not make as much money on the NAND but still a significant margin.

And the parent post is modded informative! The best of slashdot. This post needs to be modded down into negative territory.

Re: Non story (4, Informative)

Sez Zero (586611) | about a year ago | (#43422237)

That's probably the most interesting part of the story. Because of what they did in 2005, they might not be able to do it again. By over-estimating the amount they would need, they kept the price of NAN down. Because they had deals with almost everyone, all those NAN suppliers made too much. From TFA:

Back in 2005 Apple pre-paid $1.25 billion to five NAND flash memory suppliers to ensure they would be able to supply Apple with memory through 2010. That was a five-year supply agreement (see Apple to pre-pay $1.25 billion for flash memory) that made sure Apple could continue its apparently inexorable rise as a mobile consumer electronics supplier. The five NAND flash memory suppliers were the same as those listed above although how the pre-payment broke down was not revealed at the time.

Apple also then proceeded to give its suppliers an indication of its estimated future needs year-by-year so that the vendors could tailor their manufacturing to meet its needs. The only problem was that towards the end of the five-year agreement Apple was reportedly accused of always over-estimating the need causing the flash memory vendors to be always in an oversupply situation and unable to raise prices. These accusations circulated in South Korea during 2009 (see Apple accused of NAND price manipulation).

Re: Non story (0)

Anonymous Coward | about a year ago | (#43422677)

I'm not sure I see why Apple's 5 year deal that expired in 2010 is all that relevant to flash prices in 2013.

If Apple needs NAND that badly, they can build their own plant and pay someone to staff & operate it. They've done it before with other suppliers.

Re: Non story (3)

hairyfeet (841228) | about a year ago | (#43422255)

I don't know if I'd bet the farm on that Hoss, in 2011 Flash prices were pretty volatile and there was fabs being built and shrinks happening so I wouldn't be surprised if Apple chose to wait until things were more stable before signing a long term contract of such high value.

At the end of the day Apple can get bit in the ass by a sudden change in the market, no different than anybody else. I mean I'm sure Dell and the rest of the OEMs wished they had bought a year's supply of hard drives before the flood but it just didn't make sense at the time because sizes were going up and prices down, sometimes shit does just happen ya know. Hell considering how fricking loyal Apple fans are they could probably raise prices 30%+ to cover the cost of getting the flash and still make crazy profit so I'm really not seeing this actually hurting the company, if flash gets tight the ones I see it hurting are those Droid tablets that are in a race to the bottom right now.

Gotta give Jobs credit, nice thing about marketing your company as a high end brand is people expect it to be expensive so passing on the costs to the consumer really isn't as hard for them as it is a Dell or HP that have razor thin margins.

Re: Non story (4, Interesting)

c (8461) | about a year ago | (#43422763)

if flash gets tight the ones I see it hurting are those Droid tablets that are in a race to the bottom right now.

If flash gets tight, Adnroid tablet makers don't have many qualms about reducing internal flash and externalizing storage costs via (micro-)SD cards. As it is, a lot of those tablets might already be using lower capacity/spec flash that Apple wouldn't touch if it was free...

Re: Non story (1)

Anonymous Coward | about a year ago | (#43423065)

So you are saying its a great thing that most android systems were willing to add a microSD slot?

Re: Non story (4, Insightful)

Xest (935314) | about a year ago | (#43423013)

The reason Apple's iPhone/iPad sales were up last quarter but their profit remained flat is because they were losing more money on the supply chain.

So I wouldn't assume it wont hurt them, it already did on other components (screens), it likely will on flash too. It may well mean that not only will profits be flat again with an increase in sales, but might actually decline despite shifting more units.

Effectively much of Apple's profits have been gained because they had great deals on components, they don't have those deals any more, and their suppliers like Samsung are sick of their lawsuit antics and in close competition now so are unlikely to sign such sweet deals again either. You're right that they could raise prices but that will have an impact on sales - maybe not to fans, but certainly to the average Joe who also buys the iPhone normally.

Effectively they're in a quandary, because costs of production has gone up as fast as rate of sales causing flat profits, if they raise prices then they'll lose even the continued increase in rate of sales, if they don't, then profit might actually go down. The only way they can deal with it is to make more profit elsewhere (i.e. a new product line), or somehow more drastically increase rate of iThing sales to outpace the growth in component cost.

In reality they'll probably attempt both, the success of which will no doubt play out in front of our eyes in the next year dependent on whether the iWatch and iTV turn up, or the iPhone 6 and iPad 5 can steal a serious share of the market back off of Android. They certainly can't rely on cheap component deals though - I suspect even Foxconn will be reaching a point where it realises it's got Apple by the balls in terms of manufacture given that perhaps no one else can churn out the levels Apple needs to meet demand and may start upping it's prices somewhat too.

apple are retards (-1)

Anonymous Coward | about a year ago | (#43422069)

apple are such retards..... why didn't they make the iphone with limited internal storage, just enough for apps and some media, and let the user put the rest of their stuff on a microsd card???? that means there could have been so much less usage of flash memory supplies in the long run.... stupid companies who just use resources without any thought to long-term sustainability

Re:apple are retards (2, Insightful)

Doug Otto (2821601) | about a year ago | (#43422149)

It'd be easier to accept your assessment of Apple's intellectual prowess if you used things like capital letters and punctuation.

/just sayin

Re:apple are retards (1)

bhagwad (1426855) | about a year ago | (#43422199)

Which is entirely tangential to the point he was making. Since he made an argument and not merely an assertion, there's no reason to look at his grammar or anything else other than the actual logic used no?

Re:apple are retards (0, Troll)

Joce640k (829181) | about a year ago | (#43422243)

If he can't put a complete sentence together, why would he be able to put a complete argument together?

Re:apple are retards (1)

bhagwad (1426855) | about a year ago | (#43422479)

It's for you to decide by examining the argument itself isn't it?

Re:apple are retards (1)

Anonymous Coward | about a year ago | (#43422337)

It would be easier to accept your authority on any subject that matters if you didn't have that big blue turd next to your username. /just sayin

Re:apple are retards (1)

Goose In Orbit (199293) | about a year ago | (#43422775)

And ditto you with the AC...

Re:apple are retards (1, Flamebait)

i_ate_god (899684) | about a year ago | (#43422165)

long term sustainability is not profitable.

Re:apple are retards (1)

interval1066 (668936) | about a year ago | (#43422267)

I don't think Apple are retards. They didn't see Samsung coming, I think.

Re:apple are retards (1)

Doug Otto (2821601) | about a year ago | (#43422303)

I'm sure this has nothing to due with the announcement that Apple is shifting development to TSMC, instead of Samsung, for their upcoming A7.

Re:apple are retards (0)

Anonymous Coward | about a year ago | (#43422589)

hahaha, disregard that, i suck cocks.

Re:apple are retards (1)

backslashdot (95548) | about a year ago | (#43422611)

Yup, so retarded .. I mean any fool can be one of the top companies in terms of revenue, market capitalization, and profitability?
I'm sure you could make such a company too if you wanted.

Re:apple are retards (0)

Anonymous Coward | about a year ago | (#43422689)

Hello 12 year olds of the internet!

Re:apple are retards (1)

ultrasawblade (2105922) | about a year ago | (#43422957)

My theory is to avoid paying royalties to Microsoft for implementing the FAT32 format, which would be pretty much necessary as people would expect to be able to shove the SD card into their Windows system and access files.

Yes please (-1, Troll)

lesincompetent (2836253) | about a year ago | (#43422073)

Make them squirm. DISCLAIMER: i hate apple.

Re:Yes please (2, Insightful)

Anonymous Coward | about a year ago | (#43422141)

Nothing like the nerdrage geeks seem to have against companies they have nothing do with. Grind your teeth!

Disclaimer: I hate the fact that people get so riled up over cell phones

Re:Yes please (4, Funny)

Thud457 (234763) | about a year ago | (#43422387)

OH YEAH?!! Well, your favorite brand of pencil sucks. They don't even use sustainably-grown cedar!

Re:Yes please (0)

Anonymous Coward | about a year ago | (#43423051)

... They don't even use sustainably-grown cedar!

Of course not! Who wants to use pencils made out of dead trees?

Re:Yes please (0)

Anonymous Coward | about a year ago | (#43422453)

I hate the fact that enough people invested in a closed platform that allowed a company enough power to even think that they could say "hey, I'm going to charge 30% for in app payments. Oh, did I mention? You can't have different prices any where else!"

So the choices of a few million idiots would have affected me even though I have no interest in their products! And you wonder why people nerdrage? People like you who think there's no reason would have overnight caused prices all over to go up 20-30%, just like that!

Re:Yes please (0)

Anonymous Coward | about a year ago | (#43422665)

Yeah, it's almost like there's never been a middleman in any business before Apple.

Re:Yes please (2, Insightful)

Anonymous Coward | about a year ago | (#43422815)

Yes, would've been much better to still be in these mythical days when everything about smartphones was cheap, open, easy to use, and not at all locked down and preconfigured with abortionware by the cell carriers.

You lot amuse me - the iPhone is orders of magnitude more "open" and functional than anything that existed in anything remotely resembling a "mainstream" smartphone market prior to the iPhone's debut. But because it's not completely open in every way you can imagine, you clickety-clack away on Slashdot, burning all that nerdrage - and probably some lean tissue - talking about how Apple's entrance into the smart phone market plunged us into some sort of Smartphone Dark Ages.

The good old days you all seem to remember aren't anywhere near as good as you'd like to believe they were. And the best thing is, we have legitimate competition in the smartphone market between Android & Apple - which means that we, as consumers, will continue to benefit as they duke it out.

Quit yer bitchin - these are great days we're living, bros.

(Incidentally - since Apple's 30% cut is so unreasonable and extortionary, where are the multitude of viable competitors charging something significantly less than that? Maybe that 30% really is a lot closer to 'break-even' or 'modestly profitable' than you'd like to admit, given that they're handling hosting, sales, distribution, and payment processing?)

So much FUD (4, Insightful)

Anonymous Coward | about a year ago | (#43422081)

Every time a company is not 100% vertically integrated you get these kind of fearmongering articles. NAND flash is a commodity, they can find it somewhere else.

Re:So much FUD (3, Interesting)

Joce640k (829181) | about a year ago | (#43422251)

Every time a company is not 100% vertically integrated you get these kind of fearmongering articles. NAND flash is a commodity, they can find it somewhere else.

But not necessarily at a price that makes people happy.

I hate the term FUD (1)

Anonymous Coward | about a year ago | (#43422319)

FUD was really for describing large corporations' tactics of spreading disinformation against competitors products or services.

The most famous and probably the start of the term "FUD - Fear, Uncertainty and Doubt" was Microsoft's comparisons of their OS with Linux - especially for server and other back end applications.

In this case, it is inappropriate.

Remember the tsunamis and other natural disasters in SE Asia that cased supply chain nightmares for months afterwards in the computer industry? Apple was affected too.

But I mean, let's say this is true. I, as a consumer, don't give a shit. If I were a stockholder of Apple, then I may be concerned about a couple of quarters at best.

But as of now, Apple has bigger issues than Samsung as a supplier

tl;dr; "FUD" is an over used expression and is being used as a lazy means of disputing arguments one may disagree with.

But other than that, the parent is correct in that this is a non-issue for everyone but the purchasing dept at Apple.

Re:I hate the term FUD (4, Informative)

DragonWriter (970822) | about a year ago | (#43422539)

The most famous and probably the start of the term "FUD - Fear, Uncertainty and Doubt" was Microsoft's comparisons of their OS with Linux

No, its not probably the start of the term; it goes back, in that specific form, at least to IBM's tactics against competitors in the 1970s.

What Would Steve Do? (4, Funny)

Maximum Prophet (716608) | about a year ago | (#43422089)

If Steve Jobs were still alive, he'd just find the next big thing, and stop using NAND flash. Memristors anyone?

Of course, if anyone else tried this, the new tech would be non-viable, but Steve would use his force of will to make the new tech work at the price he wanted to pay.

Re:What Would Steve Do? (1)

rvw (755107) | about a year ago | (#43422201)

If Steve Jobs were still alive, he'd just find the next big thing, and stop using NAND flash. Memristors anyone?

In Soviet Union, comradstors would keep Steve fleshy and alive!

Re:What Would Steve Do? (1)

bhagwad (1426855) | about a year ago | (#43422217)

Seriously?...

The fact that I can't tell if this is sarcasm or not...ouch.

Re:What Would Steve Do? (1)

interval1066 (668936) | about a year ago | (#43422285)

Don't think so. NAND is going to prevail longer than that.

Re:What Would Steve Do? (-1)

Anonymous Coward | about a year ago | (#43422987)

If Steve Jobs were still alive, he'd just find the next big thing, and stop using NAND flash. Memristors anyone?

Of course, if anyone else tried this, the new tech would be non-viable, but Steve would use his force of will to make the new tech work at the price he wanted to pay.

I hope you're not serious. Apple has NEVER found the next big thing, ever. Everything apple has ever made has always been done by someone else previously. Apple is just really good at attracting people in their 40s and people in their 20s to buy their products at a premium and that's it.

And as soon as apple releases a product at least 2 other companies release their own version which is a superior product at a much lower cost.

Apple has little to do with jobs at all really, he was just the spokesman. His engineers, marketing department, designers and lawyers are what built apple. He didn't do anything but soak up credit for it all and grand standed in front of everyone. Kind of like how movie directors take credit for everything when they are just a small cog in a big machine, or everyone thinks the president runs the country when in reality he is just a mouth piece. Jobs was just a showman that's it. Apple lovers praised him for being a genius, everyone else though he was a dick, and only half of those people were right.

WTF? (0)

Anonymous Coward | about a year ago | (#43422109)

Samsung has a monopoly on NAND flash chips?

This whole none-story is based on a ludicrous premise.

EETimes is putting out click bait now? WTF?

Re:WTF? (1)

alen (225700) | about a year ago | (#43422191)

samsung is the largest manufacturer of flash

apple's problem now isn't design, its sourcing enough materials to be able to make enough products to fulfill demand. look at HTC. they designed a decent phone but can't seem to manufacture it to actually sell it in the store to people

Re:WTF? (2)

NatasRevol (731260) | about a year ago | (#43422681)

Samsung has a monopoly on NAND flash chips?

Not a monopoly, but a clear majority of world wide manufacturing.

so who is samsung going to sell to? (5, Insightful)

alen (225700) | about a year ago | (#43422113)

this is not a school yard
samsung borrowed lots of money to build high tech flash memory factories. they can play hardball with apple, but they need to have a customer lined up to buy up whatever apple doesn't. unused capacity means lost revenue while salaries and interest on the debt still has to be paid

Re:so who is samsung going to sell to? (4, Interesting)

h4rr4r (612664) | about a year ago | (#43422145)

This.
The article is completely crap. Samsung will sell flash to anyone who will buy it, until they are out of capacity. Sure they will likely give better deals, faster delivery, whatever to their own mobile and computer divisions, but they are in the business of selling these chips. They are not out of spite going to ignore a huge customer.

Re:so who is samsung going to sell to? (2)

hairyfeet (841228) | about a year ago | (#43422317)

The problem with your theory is this: In 2011 there really wasn't as much stuff using those chips as there are now. In 2011 only the most high end TVs were "smart TVs", now even the low end sets have some smart features which means flash, hell pretty much every thing with a screen now uses flash memory and with so many appliance makers out there if Samsung wants to play hardball I seriously doubt it'll be hard to find takers for those chips.

But Apple is sitting on such a mound of capital I'm shocked they just haven't had their own fab built, not like their usage of flash chips is gonna go down at any point in the next several years barring some breakthrough in storage tech so if Apple has to scramble for chips i could easily see them either building their own or buying one of the smaller fabs for themselves. After all wouldn't be the first time, look at how they bought PA Semi so they could bring chip design in house.

Re:so who is samsung going to sell to? (1)

h4rr4r (612664) | about a year ago | (#43422465)

Short of buying someone with a fab, Apple cannot just buy a fab. They need the knowhow as much as the physical plant. What will happen is they will buy rights to the output of a fab for X years for Y dollars. They could also buy a small Fab firm, but there are not that many of those left. Who short of Intel and Samsung is down to 22nm? And we both know Apple is not buying Intel or Samsung.

Re:so who is samsung going to sell to? (3, Interesting)

default luser (529332) | about a year ago | (#43422695)

Short of buying someone with a fab, Apple cannot just buy a fab. They need the knowhow as much as the physical plant. What will happen is they will buy rights to the output of a fab for X years for Y dollars. They could also buy a small Fab firm, but there are not that many of those left. Who short of Intel and Samsung is down to 22nm? And we both know Apple is not buying Intel or Samsung.

How about Sandisk?

They're a 6 Billion dollar a year company in terms of revenue (about a quarter of Samsung), and with a market cap of 14 Billion they're quite purchasable.

The company has a shiny outlook thanks to the increase in flash prices this year [seekingalpha.com] , so I would think that a takeover bid would be graciously accepted right now.

They have their own NAND fabs, have a growing SSD business (vertical integration with desktops?). The only stick point I can see is the Sansa music players, which might get buried during the buyout.

Re:so who is samsung going to sell to? (0)

Anonymous Coward | about a year ago | (#43422729)

They are not out of spite going to ignore a huge customer.
 
Hey now, while I agree with you, let's not smash any fanboy fantasies out there.
 
Too many Slashdotters don't have a real world outlook on much of anything that isn't at their fingertips and there's even a high number of those that don't have a real world outlook of their own lives. Everything to them is good versus evil. This week Samsung is good and they need to slay the dragon known as Apple. Next week it'll be back to Linux vs MS or Google vs Apple or WikiLeaks vs the USA... whatever.
 
It's just another reason to look at any business news on Slashdot as a joke. Too many people don't understand business because they can't see the forest for the trees.

Re:so who is samsung going to sell to? (3, Insightful)

radio4fan (304271) | about a year ago | (#43422253)

The summary is way over-dramatic.

The customer they have lined up to buy the NAND flash is Samsung itself, as they're now making a shit-load of smartphones, tablets, TVs and whatnot. There just may not be enough flash memory to go around.

The article is also littered with phrases like "what effect, if any..", "one can imagine that...", "there is the possibility that..."

Re:so who is samsung going to sell to? (3, Insightful)

Sponge Bath (413667) | about a year ago | (#43422429)

This other confidence inspiring gem FTA stuck out:
"There are few reliable sources for this, a comment in the Korea Times here, an unnamed supply chain sources there, but the general opinion is that..."

Re:so who is samsung going to sell to? (0)

Anonymous Coward | about a year ago | (#43422897)

In other words, what this means is that somebody at EETimes really likes Android & Google, and wants to convince you that Apple is doomed! DOOMED!

After all, if a meteor strikes cupertino, one can imagine that it might impact Apple's operations, whereas there is the possibility that Samsung would be completely unaffected! It's unknown at this point what effect, if any, such a meteor strike might have, but we can easily imagine that a meteor strike would render Apple's corporate campus a smoking crater!

Re:so who is samsung going to sell to? (0)

Anonymous Coward | about a year ago | (#43422669)

Samsung don't need shit from Apple or anyone to take their place. The amount of money they made from selling to Apple was a drop in the bucket compared to their other sales.

So what... (3, Insightful)

multimediavt (965608) | about a year ago | (#43422147)

Pay particular attention to the 'Total cash' line item. [yahoo.com] Apple could build their own fab anywhere they wanted with the amount of cash they have. Why is this an issue? Oh yeah, it's not. More FUD on a slow news day.

Re:So what... (4, Insightful)

Targon (17348) | about a year ago | (#43422239)

A fab isn't just some generic piece of equipment, and getting beyond 32nm has proven difficult for most companies. If it were so easy, then AMD would have 22nm processors currently and wouldn't be having nearly as many problems competing in the CPU space. There is also expertise that is required beyond the basic equipment.

Re:So what... (0)

Anonymous Coward | about a year ago | (#43422377)

They could go to their other partner, Intel. Or they could go to TMSC or IBM. Those guys may know a thing or two about making chips.

Samsung is playing hardball, because it can (it should against Apple they are sharks). I would be more worried about NK getting crazy and it hurting Samsung if I were Apple...

Re:So what... (2)

Dishevel (1105119) | about a year ago | (#43422433)

Not only the expertise, but also the time required to get up and running, but also the time.
Once you decide to set up your own chip fabrication plant it will be a few years (maybe a few more) before you start producing the chips.
By that time the entire market can change. Setting up your own fab is not a solution to a problem you see coming in 2013 or even probably 2015.

Re:So what... (2)

interval1066 (668936) | about a year ago | (#43422305)

Yes, they probably can do this. But building a fab for every supply problem isn't practical.

The usual way... (2, Funny)

Anonymous Coward | about a year ago | (#43422151)

...they invent flash and sue everyone who uses their patent.

Re:The usual way... (0)

Anonymous Coward | about a year ago | (#43422207)

No. They will use older technology and have a big release party.

Stupid Move (0)

Anonymous Coward | about a year ago | (#43422163)

If I were a Samsung shareholder and if Samsung did something like this (which I doubt they would do - I imagine the article is just a click bait article about two companies that get people all in a tizzy), which amounts to throwing away an incredibly lucrative contract out of spite - I'd be more than a little pissed. Apple represents a not-insignificant portion of Samsung's income and throwing away* those billions of dollars isn't good business by any sane metric.** If I saw Samsung management making stupid decisions like that, I'd be voting for new management who made sound business decisions rather than emotional ones.

* Yes, I realize that the patent troubles between the two companies is resulting in Apple pulling away from Samsung but speeding up that breakup, rather than taking steps to halt it, is still bad business.
** While I know that emotions on Slashdot run furiously hot (either for or against Apple and/or Samsung), in the real world of big business, emotions are bad business. Sound business decisions are what you base your decisions on, not emotions. It ain't high school kids.

Re: Stupid Move (1)

UnknowingFool (672806) | about a year ago | (#43422225)

Well the lawsuit aside, it would not be wise if Apple relied completely on one supplier for parts. This is part of the reason they went with TSMC for their A6 chip. Another reason is likely that TSMC already has a 28nm line while Samsung is still building theirs. I assume when Samsung's line is up, Apple will use both companies. One thing that article assumes is that Samsung is the only supplier of NAND chips in the world which is false. Now Samsung might be one of a handful that makes particular kinds of chips (speed, capacity) that Apple wants but they are not the only game in town. Toshiba, Hynix, Micron, and Intel will gladly sell billions of dollars to Apple.

Re:Stupid Move (1)

Anonymous Coward | about a year ago | (#43422229)

Short-term versus long term.

In the short term Sammy could get some money on low-margin commodity NAND chips, until/unless Apple decided to switch suppliers in the future.

Long-term they could try and use the opportunity to hit their main competitor in the high-margin smartphone market.

Nobody makes big bucks selling commodity hardware.

Re:Stupid Move (4, Insightful)

TheSkepticalOptimist (898384) | about a year ago | (#43422335)

6 years ago Samsung was barely a competitor in the non-smartphone market, now Samsung is outselling Apple in smartphones.

Samsung is probably their own biggest customers for their NAND flash. Companies often "buy" within their own divisions, so Samsung's phone division is Samsung's component division's best customer.

Now also consider that Samsung has become the largest manufacture for smart TV's and AV components, all requiring NAND flash, even some of their refrigerators have web services built into them. Samsung is creating an empire significantly larger than Apple.

ANY Samsung shareholder should be thrilled with the direction Samsung has taken and turning it into a household name that exceeds Apple's mindshare around the world.

You could be a stupid investor and dump Samsung shares because you don't like how they are treating Apple, but realize Apple is becoming a small drop in Samsung's profits and business strategy. Considering how vocal Apple has been about moving away from Samsung, Samsung is taking the right steps to sever ties and move towards more lucrative and profitable industries, namely, themselves.

Samsung makes phones, tablets, computers, the parts that goes into those devices AND TV's, appliances, and so much more. Samsung is so friggen diversified that Apple probably NEVER made a significant impact on their profits, so if I ran Samsung, I would say good riddance and cripple one of their pissy competitors in only one of their many many divisions.

Apple knew this years ago. (0)

Anonymous Coward | about a year ago | (#43422185)

Apple is the king of supply chain.

The real secret to their products is their ability to secure huge quantities of the parts they need, when the need them. This takes planning up to years in advance.
They were probably securing contracts and buying fab capacity to make iphone 5 parts before the iphone4 launched.

This way they have plenty of devices to share when the hype curve is at it's peak, and don't need to spend a premium to buy last minute parts/capacity to fill a spike in demand.

Apple has been in the process of divorcing Samsung for many years now. Apple undoubtedly already has contracts with other manufactures, and has for years now. Really, how can a company turn down offers like "We want to purchase your entire 2012-2015 flash fab output in advance. Here's money up front to expand your capacity, and more money to help develop the next gen products you're going to make for us" - This is literally the sort of deals apple makes with their suppliers.

FUD (1)

bWareiWare.co.uk (660144) | about a year ago | (#43422227)

We are all frustrated by Apple at one time or another, but that don't justify spreading ridiculous FUD.
Apple has more cash then ANYONE IN HISTORY; security their supply lines is hardly going to be difficult.

Re:FUD (0)

Anonymous Coward | about a year ago | (#43422513)

Now the question is: will the company who makes things for them... Will they be sued, especially if they make their own devices?

There's more than just money companies think about.

american companies have quit looking long term (1)

WindBourne (631190) | about a year ago | (#43422339)

So many of american companies scream free enterprise, but rarely take notice of the fact that other companies are nationalistic or simply in control of their future. For american executives, it is all about short-term profits since they own stock.

Re:american companies have quit looking long term (1)

the eric conspiracy (20178) | about a year ago | (#43422419)

Well, it's more that the executives in publicly traded companies have to report quarterly results. If they aren't good the heat comes.

Look at Ron Johnson.

Re:american companies have quit looking long term (2)

WindBourne (631190) | about a year ago | (#43422869)

Before the GD, we allowed executives to own stock. As such, many of our companies were short-sighted and we had crashed every 20 years or so. Since 1933 when the no-executive-own-stock was put in place, the companies switched to long-term focus and we had massive economic expansion. It was after reagan rolled that EO out and allowed executives to own stock that we have seen nothing but short-term focus. It has nothing to do with profits. It all has to do with stock manipulations. Look at GE, IBM, and HP. They have done massive damage to themselves via CEOs that look short-term. Heck, an even better example is American Airliens. They did great under Bob Crandall. Under the next 2 CEOs, the companies was bankrupted. Why? Because the executives had loads of stock and pushed for short-term manipulation that ran up the stock price at which point the executive sold much of their stocks, while waiting for more.

What is needed is for an EMPLOYEE STOCK. One that is tied to profits, and is not allowed to be sold on the open markets. Yes, basically, an ESOP. However, they need to make it so that NO employee is allowed to own any public stock in the industry.

Re:american companies have quit looking long term (2)

Chance Phelps (2880963) | about a year ago | (#43422549)

Quite true. Most American companies have to show more revenue and profits than what they got in the previous quarter, else the shareholders will scream bloody murder. However, the Asian companies have got it right: profits don't matter. Marketshare does. Once you have control over the market bordering on the monopolistic, you can charge what you feel like. They also make long term investments (like Samsung in TFA). On the other hand, you have companies like HP whose operations seem to be planned on a day-to-day basis. Even then, they have trouble sticking to their plans (or CEOs).

Wow... Talk about pulling a story out of thin air (4, Insightful)

93 Escort Wagon (326346) | about a year ago | (#43422399)

The article starts by saying there's little to no reliable evidence for this... but Apple MAY be planning to jump ship on Samsung with regards to manufacturing of its A7 processor. Then, from there it goes on to "if this happens, how will it affect Samsung's willingness to sell memory to Apple", and speculates (with zero support, not even rumors) that maybe Samsung MIGHT need to keep more of its own memory for its own products, in which case it MIGHT have to allocate how much memory Apple can buy (again, this is not even supported by some whisper the author heard in a bar - he's flying solo).

That's bad rumor-mongering even by analyst standards.

Re:Wow... Talk about pulling a story out of thin a (3, Informative)

MightyYar (622222) | about a year ago | (#43422475)

...all in the midst of a glut in capacity in the semiconductor industry.

Because. Offshoring. (1)

sl4shd0rk (755837) | about a year ago | (#43422515)

This is the thing I hate -- and it's not just Apple. These US companies offshored Allllll their manufacturing and processes to take full advantage of cheap labor, third-world economies and loose environmental restrictions. People at home get laid off[0] jobs dried up, manufacturers closed their doors, and a good portion of blue collar labor went on unemployment. Now, these same assholes complain their is no "skilled labor" to fill their job openings, so they need to import H1B workers[1]. What's more, then become worried that they can't find a source for components for their gizmos that USED TO BE PRODUCED IN THEIR OWN BACKYARD? The irony is mind-numbing.

[0] - TI lays off 1700 [cnet.com]
[1] - H1B Visa lottery [reuters.com]

Apple may need to put down billions of dollars (2)

Swampash (1131503) | about a year ago | (#43422555)

Yeah, that'll be a real disaster, what with Apple being so short of cash and all.

iFab (1)

magowski (2884497) | about a year ago | (#43422595)

Time for an iFab. Apple can easily foot the bill for a new fab anywhere they want. Hopefully in the USA.

They should perhaps invest in manufacturing. (1)

tuppe666 (904118) | about a year ago | (#43423011)

Time for an iFab. Apple can easily foot the bill for a new fab anywhere they want. Hopefully in the USA.

The fact its an entirely different business from manufacturing they rebadging foxconn phones, its what up until recently so profitable [not so much anymore...ask foxconn] where Apple make 40% and Faoxconn make about 3%, setting up facilities even if they manage to move that much money around, takes time and planning, and whatever they so they will shit on the USA.

so im assuming the conversation would (0)

nimbius (983462) | about a year ago | (#43422711)

go something like this:
Samsung:we're instituting a policy to limit the amount of flash you can purchase from our company.
Apple: and now that we own Samsung, we're rescinding the
policy, firing the management that instituted it, buying their homeowners association,
and forcing them to live out the rest of their days in an underpass near the airport.

Samsung: we dont think thats a very good idea
Apple:: then think different while you're fighting for that big piece of cardboard tonight.

Lets put your convo in perspective (2)

tuppe666 (904118) | about a year ago | (#43422933)

Apple much to its disgrace has large amounts of unused cash around, that perhaps it should have invested earlier, but buying out Samsung is simply not even close to being a reality, Samsungs market cap sits at $200Billion admittedly half that of Apples Plummeting Market cap of $400Billion, but it is far too large for Apple to buy.

Re:so im assuming the conversation would (1)

Anonymous Coward | about a year ago | (#43423009)

Don't assume. You make an ass out of u and me.

Can't they sue someone? (1)

chemosh6969 (632048) | about a year ago | (#43422883)

That seems to be their strategy to stay on top lately.

conpiracy theory (0, Troll)

slashmydots (2189826) | about a year ago | (#43423031)

I honestly think that Apple and Microsoft are now having a stupid-off. They're seeing which foot-shooting, disasterous decisions each can make to see who can bankrupt the company first. everyone weigh in on who you think is winning. Is suing the people who make your screens, lease you patents, and sell you flash memory the stupidest or is an OS with a UI from hell that everyone hates followed by double downing by blaming your vendors then undercutting them and making your own devices stupider?
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