Monday, October 1, 2012

Apple Cutting Out Samsung Chips?

Teardown of iPhone 5 reveals that none of  the DRAM, and NAND memory and other chips on the iPhone were made by Samsung. Already in the iPad (See March iPad teardown) Samsung had fewer parts than in previous Apple products. Samsung is still making the A6 processor for Apple.

The article below discusses the likelihood of Apple moving its processor away from Samsung. It is not likely to happen very soon.

The turn around of design and qualification of a new microprocessor design in a new fab vendor takes many months. Only very few companies have the processing and fab capacity capabilities to manufacture and design a new microprocessor (i.e. Intel and TSMC)  This is a result of the continuing consolidation of the semiconductor industry (see March comments Moore's Law End?).


Apple Just Took Its War With Samsung One Step Further

September 24, 2012 Stephen Rosenman

 The iPhone 5 tear down divulges lots of goodies: Triquint (TQNT) amp, STMicro (STM) accelerometer, Elpida DRAM, Hynix flash NAND, Qualcomm (QCOM) RF power chips, Skyworks (SWKS) amplifier module, Broadcom (BRCM) touch screen controller and Murata 339S0171 Wi-Fi module to name a few. Apple (AAPL) has blessed these vendors with an iPhone windfall.
Missing in action - Samsung (SSNLF.PK).
No Samsung components. Wow!

That Samsung battery present in the 4S. Gone. Looks like Sony got that! No more Samsung DRAM or Flash! Their high-resolution screen? That too has been replaced by Sharp, LG, and Japan Display.

Estimates were going as high as $11 billion of Samsung in Apple's line-up for 2012. Considering that Apple's COGS is $83 billion for trailing 12 months, Samsung was raking it in from its chief competitor. This marks a sea change.

Tim Cook definitely has taken this nuclear war to Samsung. First in the courtroom. And now in its choice of supplier.

In one fell swoop, Apple removed essentially all Samsung components from the 5.

Still, this is only one phone that's been taken apart. Perhaps, Samsung will show up in another iPhone 5. Apple does use multiple vendors for some of its components. We'll see if Samsung has been left out in the next tear down.

The only vestige of Samsung remaining: Fab for Apple's A6 chip. IHS estimates the per-ship cost of the A6 to be $17.50. At that price, Samsung will be seeing a ton of money coming their way. Just nowhere near $11 billion. From our first look within the iPhone 5, Samsung lost a lot of real estate. We're getting closer to a Samsung-free product. Good going, Apple.

Just one last step. My little suggestion: Move those A6s over to Intel (INTC). A long shot for sure but wars can create wild opportunities. Stranger things have happened.

Disclosure: I am long AAPL. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)

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