Apple Renews Contract With Samsung Over A-Series Processors 101
tlhIngan writes "In an interesting move since Apple decided to partner with TSMC a few weeks ago, the Korea Economic Daily is reporting that Apple has re-signed a contract with Samsung to produce the A-series chips Apple uses to power its iPads, iPhones and iPods. TSMC is still to produce chips for Apple, though Samsung is poised to take over from 2015."
It's a $4-9 Billion Option (Score:5, Informative)
Apple could do it, but it's a very expensive bet.
TSMC spent $9.4 billion [reuters.com] on their latest 300mm fab, and it will be running pretty much 24/7/365 for many, many years. And if Apple broke ground tomorrow, it's still likely to be 3 years before the fab is fully built, equipped, staffed, qualified, and running at full speed. Unless Apple is sure it can get chip volume high enough to achieve real cost savings, it's probably not worth doing.
And by then the industry might have started transitioning to 450mm.
Apple is one of the few companies in the world who could drop that much out of actual cash-on-hand without blinking, but it's a very risky bet with potentially a lot more risk than reward.
Re:Simple business decision (Score:5, Informative)
Seems like Apple in US...
Not even close. Samsung accounts for nearly 20% of the Korean economy. Much of the rest of the economy is controlled by one of the other four big chaebol (conglomerates). Samsung has their tentacles into every part of the economy and government. Many politicians have close links to company, and many are open about being in their pocket because "what's good for Samsung is good for Korea!" In the past, whenever Samsung wanted to enter a new line of business, the government would inform their incumbent competitors to either sell out, shut down, or face the consequences (audits, arson, arrest, etc.). Today it is just a bit more subtle.
Re:Simple business decision (Score:5, Informative)
Samsung takes it to a whole new level. Their CEO has been convicted of felonies twice (two separate occations) and had the verdict put aside because he was deemed too valuable to the Korean economy. American Corporations have power, but in Korea, Samsung, and to a lesser extent the other Chaebol, are truely above the law.