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.