Lost Apple orders force Samsung to question building another fab

November 7, 2012
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Samsung makes many of the components that are required to build smartphones, tablets, and computers. Apple buys a lot of those components. Take the recently launched iPad mini for example: Can you guess who’s responsible for the screen and the A5 processor? Now the thing is, Apple hates Samsung. For good reason too. Because Apple orders parts from Samsung, Samsung knows what Apple is going to build in the future. And because Samsung has a rough idea of what Apple is working on, they can rapidly release products that compete with Apple’s portfolio.

According to DigiTimes, who has a track record that’s 50/50, meaning they’re hard to take seriously, but they’re also impossible to ignore, they say Samsung is going to delay building a new fab due to Apple. Because Apple hates Samsung guts, they’re shopping around, looking to get components from various other companies. Rumor has it that this year we’re going to see the first iOS devices ship that use processors made by TSMC instead of Samsung. This fab that Samsung is delaying, it was supposed to start volume production in 2014. It was going to pump out 20 nanometer and 14 nanometer processors.

So what’s going to happen now? We’re not really sure. Samsung had some issues meeting demand for the Galaxy S3 when it launched back in May/June. We don’t have any official confirmation about which component was responsible for causing those supply constraints, but we doubt it was the processor.

At the end of the day, Apple deciding to do less business with Samsung means Samsung can use more of their components to increase phone production. That’s the key take away here. Samsung is absolutely dominating the mobile phone market, and we don’t think that losing Apple orders will impact their future. What might hurt Samsung? Google deciding to stab them in the back, but we don’t see that happening.

Comments

  • Topcat488

    This article makes no sense at all, I clicked on because i own a SG-Note… What is meant by “fab”, i take it to mean phablet, you know even shortened of the words phone/tablet… Now after reading the article i don’t know what the hell to think… My question is, will Samsung be making a Note III? Or should i take your article as 50/50, and i don’t want to hear about the SGsIII. What does that have to do with your “Headlines” sIII is not a “FAB”.

    • http://www.facebook.com/ostrowski.m MichaĹ‚ Ostrowski

      “Fab” means “factory”…

      • Topcat488

        Ok thanks Michal, i guess i learn something new everyday. Never too old to learn i say…

      • Adam Eldin

        a chip fabrication facility

    • http://www.facebook.com/profile.php?id=1185010106 Rien Soewardji

      Fabrication.

  • Dirk Teichman

    FABricate. To make, or design.

  • http://twitter.com/wizardprang Wizard Prang

    Why is this news? If Apple hates Samsung’s guts, why don’t they just take their business elsewhere?

    Yes, I am being slightly sarcastic, but not by much.

    • urawhat

      Fabrication or the manfacture of a computer chip or screen requires a special company. So that is why samsung has apples balls.

  • Driod

    Apple pulling out from Samsung fab is highly predictable. At the same time, TSMC is currently pushing wafer fab OEMs to start out new 300mm fab which might be for apple expansion plan. TSMC being the world top foundry, we might see some gain in lead time. TSMC is currently have high yield in 40/45nm devices and the smaller nodes yield’s are picking up fast. But going smaller node might seem more problem for foundry. Within foundry, TSMC, globalfoundries, UMC and other foundry player also fighting very hard to get the market share for 32/20/14nm business.

    But after all, Samsung can produce more Samsung devices using the current already available Fab. We might not see samsung producing apple like product in the future as apple has stop innovating. It might even become reverse. Who know!!!

  • nilbud

    Samsung designs and builds components which apple then selects and clips together into their product. Apple are parasites on Samsung not the other way around.

  • Guest

    In the microelectronics industry a semiconductor fabrication plant (commonly called a fab) is a factory where devices such asintegrated circuits are manufactured.
    http://en.wikipedia.org/wiki/Semiconductor_fabrication_plant

  • Alnoor Karim

    Right, and if Google stabs Samsung in the back, Android will suffer! You have to agree majority of Android sales have been because of the slick Samsung built smartphones….