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(Reuters)   Despite fallout from patent ruling, Apple and Samsung resume being frenemies, with Samsung continuing as sole supplier of critical chip used in iPhone and iPad   (reuters.com) divider line 54
    More: Followup, iPhone, iPads, Apple-Samsung, apples, HTC Corp., wireless technology, Kwon, resumes  
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2029 clicks; posted to Geek » on 27 Aug 2012 at 9:07 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-08-27 09:15:43 AM
Maybe Samsung has a kill switch in the chip that they can activate at any time.
 
2012-08-27 09:24:47 AM
"Apple needs Samsung to make the iPhone and iPad. Period. Samsung is the sole supplier of Apple's processing chips and without Samsung, they can't make these products," said James Song, an analyst at KDB Daewoo Securities in Seoul."


I think he's talking about the processor... which is a licensed ARM design that's been customized by Apple, unles my memory is playing tricks on me. Samsung is merely under contract to fabricate it and while they might be the most cost effective supplier, I doubt that there's anything unique about the facilities required.
 
2012-08-27 09:28:54 AM

Satanic_Hamster: Maybe Samsung has a kill switch in the chip that they can activate at any time.


Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.
 
2012-08-27 09:36:45 AM

AndreMA: I think he's talking about the processor... which is a licensed ARM design that's been customized by Apple, unles my memory is playing tricks on me. Samsung is merely under contract to fabricate it and while they might be the most cost effective supplier, I doubt that there's anything unique about the facilities required.


Unique, probably not. But even if Apple started working on changing suppliers today, they probably have bonded stock they need to go through. Meanwhile, it'd take as much as a couple years to find and qualify a company, hammer out a contract, build up capacity and then set up the process. The equipment is probably the same stuff used to make any processor, but they're wicked expensive so it's not like even a Tier-1 supplier has all that excess capacity lying around. Samsung is a Korean company so even if the parts are made in China by CMs I'd imagine Apple might have problems just calling them up and saying, "We're Apple and you work for us now."

It'd be hilarious to try to explain this stuff to finance types. . . Never has the divide between investing and business been so wide.
 
2012-08-27 09:42:00 AM
Well, duh. For Samsung to outright stop, that would be sheer lunacy since they would then breach their contract with CrApple (and then face more lawsuits).
 
2012-08-27 09:51:43 AM
you mean we can't change supply chain tomorrow?
 
2012-08-27 09:54:11 AM
Well that's silly.
Why doesn't Samsung just use their chip to make its own copy of the iPad?

/Oh, Wait...
 
2012-08-27 09:54:18 AM
"Won't you look at that. The price of all your chips for the next year went up by exactly the same amount as the settlement".
 
2012-08-27 09:56:40 AM

darkscout: "Won't you look at that. The price of all your chips for the next year went up by exactly the same amount as the settlement".


"Look at that, you're in breach of contract."

Businesses are very thorough about negotiating contracts, particularly yearly or multi-year manufacturing contracts. They can't afford the luxury of being petty because that costs them a lot of money.
 
2012-08-27 10:10:10 AM
"Apple needs Samsung to make the iPhone and iPad. Period. Samsung is the sole supplier of Apple's processing chips and without Samsung, they can't make these products,"

img856.imageshack.us
 
2012-08-27 10:11:38 AM

MacEnvy: Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.


And Apple is asking for BILLIONS of dollars in court judgments plus the banning of Samsung products from US stores. Sometimes REVENGE and retaliatory terrorism is funny. Imagine if Samsung could, with a flip of the switch, kill all Iphones and pads.
 
2012-08-27 10:17:42 AM
What? A little dust-up in legalities is no reason they can't keep making huge piles of money off of each other in the mean-time.
 
2012-08-27 10:19:20 AM

Satanic_Hamster: MacEnvy: Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.

And Apple is asking for BILLIONS of dollars in court judgments plus the banning of Samsung products from US stores. Sometimes REVENGE and retaliatory terrorism is funny. Imagine if Samsung could, with a flip of the switch, kill all Iphones and pads.


Yes, it would be the end of the company.

Samsung, that is, not Apple.
 
2012-08-27 10:21:15 AM

Satanic_Hamster: MacEnvy: Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.

And Apple is asking for BILLIONS of dollars in court judgments plus the banning of Samsung products from US stores. Sometimes REVENGE and retaliatory terrorism is funny. Imagine if Samsung could, with a flip of the switch, kill all Iphones and pads.


Samsung is still making billions even with the judgment against them. Why would they commit corporate suicide?
 
2012-08-27 10:25:20 AM

MightyPez: darkscout: "Won't you look at that. The price of all your chips for the next year went up by exactly the same amount as the settlement".

"Look at that, you're in breach of contract."

Businesses are very thorough about negotiating contracts, particularly yearly or multi-year manufacturing contracts. They can't afford the luxury of being petty because that costs them a lot of money.


No, but it could hurt apple in the long run. The contracts aren't exactly all open ended, and sometimes an extra nickel a chip can eventually make up for more than a billion.
 
2012-08-27 10:27:51 AM
Samsung makes damn near everything. One division is not necessarily emotionally invested in the fights of another.

www.samsungwasherreviews.org
s3.cdn.gearburn.com
d3n6f555sx1wcx.cloudfront.net
static.mascus.com
www.blkbrn.com

/all Samsung
 
2012-08-27 10:35:13 AM

fatalvenom: "Apple needs Samsung to make the iPhone and iPad. Period. Samsung is the sole supplier of Apple's processing chips and without Samsung, they can't make these products,"

[img856.imageshack.us image 300x170]


Samsung needs the money.
With apple making gobs of money from their iProducts, devices others can't duplicate without risking a legal smack down, they can probably replace the cchipset sooner than Samsung can find a new customer.
 
2012-08-27 10:38:16 AM

Cinaed: A little dust-up in legalities is no reason they can't keep making huge piles of money off of each other in the mean-time.


That's one other thing about business. Boy is it never personal, and that's both a good thing and a bad thing. One company can drag another through a 10-year court battle, sue them for a ton of money and they'll still be discussing future joint ventures. Of course, the same mentality also means a business can ruin an entire town without a second thought. Money doesn't make people evil; it turns them into machines.

The only way to make a business' shiat list is to not pay on time.
 
2012-08-27 10:39:42 AM

MightyPez: darkscout: "Won't you look at that. The price of all your chips for the next year went up by exactly the same amount as the settlement".

"Look at that, you're in breach of contract."


"Well, let's fight it out in court. Our legal council assures me that, while we will eventually lose the case, we can tie this up in court for years."

It's definitely a lose/lose situation, but I think Apple stands to lose more in that situation. They're less diversified than Samsung. Granted, this is all just fun thought experiment. Nothing like that is likely to happen.
 
2012-08-27 10:45:03 AM

Benni K Rok: No, but it could hurt apple in the long run. The contracts aren't exactly all open ended, and sometimes an extra nickel a chip can eventually make up for more than a billion.


That's beyond silly. Samsung, besides not wanting to disrupt the cash flow from a customer, has a reputation to keep as well. If other hardware suspect they would be vindictive and arbitrarily raise prices after legal scuffles they would be less likely to send fabrication work Samsung's way.

And of course, this is assuming Apple hasn't already started vetting some of their fabrication to other places, which they are.
 
2012-08-27 10:51:29 AM

way south: Well that's silly.
Why doesn't Samsung just use their chip to make its own copy of the iPad?

/Oh, Wait...


If that's what they were doing you might have a point. What they were doing is making a competing product and letting the market decide. What apple did was claim all rights to black rectangles
 
2012-08-27 10:58:39 AM
Fallout?
Patent wars. Patent wars never change...
 
2012-08-27 11:00:44 AM

Warlordtrooper: way south: Well that's silly.
Why doesn't Samsung just use their chip to make its own copy of the iPad?

/Oh, Wait...

If that's what they were doing you might have a point. What they were doing is making a competing product and letting the market decide. What apple did was claim all rights to black rectangles


That is incorrect, and you should feel bad for thinking it. For chrissake the ruling is done, you can even read the whole case if you want.
 
2012-08-27 11:04:04 AM

LowbrowDeluxe: Fallout?
Patent wars. Patent wars never change...


There is some truth to this. Being sued or suing someone doesn't tend to generate bad feelings among larger companies and is generally seen as part of the business cycle. The work between the two will continue and sometime later it will happen all over again.
 
2012-08-27 11:17:07 AM

AndreMA: "Apple needs Samsung to make the iPhone and iPad. Period. Samsung is the sole supplier of Apple's processing chips and without Samsung, they can't make these products," said James Song, an analyst at KDB Daewoo Securities in Seoul."

I think he's talking about the processor... which is a licensed ARM design that's been customized by Apple, unles my memory is playing tricks on me. Samsung is merely under contract to fabricate it and while they might be the most cost effective supplier, I doubt that there's anything unique about the facilities required.


Samsung does, indeed manufacture the chips according to Apple's specs... However, Samsung also own a lot of patents related to the manufacturers of these chips. There are based on ARM designs but they also have Apple-centric designs to them.

Apple respect patents, doesn't it?
 
2012-08-27 11:20:16 AM
It's been amusing to listen to all the fanbois and antifanbois whoop and holler about this "momentous" legal case, but, seriously - five years down the line, some token amount of money will change hands, in the meantime, Apple and Samsung will make some deals - and business as usual will continue. Everybody's making too much money for anything else to be allowed to happen.
 
2012-08-27 11:34:25 AM

Warlordtrooper: way south: Well that's silly.
Why doesn't Samsung just use their chip to make its own copy of the iPad?

/Oh, Wait...

If that's what they were doing you might have a point. What they were doing is making a competing product and letting the market decide. What apple did was claim all rights to black rectangles


I thought it had more to do with the operating system. If it was just black triangles then Apple would have also sued the makers of the Windows phones, from what I understand, and the look and feel of the OS on my Windows phone is completely unlike the OS on my iPad and on my wife's Android phone, two different Operating Systems that quite honestly, look related.
 
2012-08-27 12:06:57 PM
"Frenemies"? YOU'RE PART OF THE PROBLEM SUBBY
 
2012-08-27 12:34:49 PM

Satanic_Hamster: Maybe Samsung has a kill switch in the chip that they can activate at any time.


Yep, just one click and all those iphones all become self aware.
 
2012-08-27 12:59:47 PM

Warlordtrooper: way south: Well that's silly.
Why doesn't Samsung just use their chip to make its own copy of the iPad?

/Oh, Wait...

If that's what they were doing you might have a point. What they were doing is making a competing product and letting the market decide. What apple did was claim all rights to black rectangles


Possibly, but it went to court and enough people thought that Samsung got too close to apples patents for black squares.
Since they were making the chips, they should have guessed that apple would look closely at any competing product that suddenly emerged.

In samsungs position, I would have done more to make my product distinct somehow.
 
2012-08-27 01:35:25 PM
Newsflash: People who run successful businesses don't act like petulant children when they make decisions.
 
2012-08-27 02:42:51 PM

MacEnvy: Satanic_Hamster: MacEnvy: Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.

And Apple is asking for BILLIONS of dollars in court judgments plus the banning of Samsung products from US stores. Sometimes REVENGE and retaliatory terrorism is funny. Imagine if Samsung could, with a flip of the switch, kill all Iphones and pads.

Yes, it would be the end of the company.

Samsung, that is, not Apple.


You are aware that Samsung makes a helluva lot more than phones. Right?
 
2012-08-27 03:01:29 PM

Carth: Samsung is still making billions even with the judgment against them. Why would they commit corporate suicide?


It's only suicide if they intend to continue conducting business within the US. Considering the absurd legal challenges and judgements they are facing, coupled with devastating injunctions, it may make sense to pull out of the US market entirely... at which point, Apple could go fark itself.

Passing up on billions now to both avoid billions in "damages" and to ensure a lock-out of Apple in international markets is a strategy that only somebody like Samsung could put into place.
 
2012-08-27 03:27:31 PM

way south: In samsungs position, I would have done more to make my product distinct somehow.


Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...
 
2012-08-27 03:31:55 PM

wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...


Yes, there's no way possible to differentiate them. That's why Apple sued everyone else over the same patents. OH WAIT THEY DIDN'T, JUST SAMSUNG.
 
2012-08-27 03:50:26 PM

hbomb1129: MacEnvy: Satanic_Hamster: MacEnvy: Yes, that would be really good for their bottom line.

I feel sometimes like people think these companies are high school football rivals or something. Samsung makes millions of dollars from supplying Apple with parts.

And Apple is asking for BILLIONS of dollars in court judgments plus the banning of Samsung products from US stores. Sometimes REVENGE and retaliatory terrorism is funny. Imagine if Samsung could, with a flip of the switch, kill all Iphones and pads.

Yes, it would be the end of the company.

Samsung, that is, not Apple.

You are aware that Samsung makes a helluva lot more than phones. Right?


Any popular goodwill they've gained in this slapfight with Apple would be completely eradicated if they intentionally broke millions of consumer devices. The billion they have to pay Apple would be peanuts compared to the corporate lawsuits for causing lost business. And don't forget that the majority of media people in the US own iPads and/or iPhones - they would get crucified in the press.

It's a childish revenge fantasy, and a dumb one.
 
2012-08-27 04:08:57 PM

wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...


Or, they could have just made their operating system look less like Apple's operating system.
 
2012-08-27 04:17:18 PM

wmoonfox: Carth: Samsung is still making billions even with the judgment against them. Why would they commit corporate suicide?

It's only suicide if they intend to continue conducting business within the US. Considering the absurd legal challenges and judgements they are facing, coupled with devastating injunctions, it may make sense to pull out of the US market entirely... at which point, Apple could go fark itself.

Passing up on billions now to both avoid billions in "damages" and to ensure a lock-out of Apple in international markets is a strategy that only somebody like Samsung could put into place.


Samsung made over 19 billion in profit last year with over 6 billion coming from the US market. They have 35 billion in cash on hand. You really think it would be a good idea to lose access to the US market and have their assets seized to send a message to apple when their profits from a single quarter in the US cover the entire judgement?
 
2012-08-27 04:22:39 PM

Great Janitor: wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...

Or, they could have just made their operating system look less like Apple's operating system.


In most countries, to be upheld a patent needs to be both 'novel' and 'innovative'.

iOS was/is pretty novel and innovative. However, nothing about the APPEARANCE is close to either test for a patent to be valid... in most countries. Which is why the courts in every other major country have told Apply to go f*** themselves when trying to uphold the same patents.

Only in the US can you patent 'a method for cleaning your ass with soft paper' and then sue anyone who tries to do so without paying royalties.

Samsung just forgot THAT.

It's the US consumer who will end up suffering if Apple do get Samsung's products taken off sale. Yay to you all.
 
2012-08-27 04:35:38 PM

opiumpoopy: It's the US consumer who will end up suffering if Apple do get Samsung's products taken off sale. Yay to you all.


Yes, one or two models of Samsung off the market will surely make us suffer.
 
2012-08-27 04:39:54 PM
Samsung went with the wrong approach in court.

"Tell me, Mr Apple, where are your factories? Oh, you don't actually have any factories. Okay, then who makes your parts? Hmmm, would it therefore be fair to say that Apple iProducts are mainly Samsung devices rebuilt to Apple's iOS specifications?"

Case over six months ago.
 
2012-08-27 04:40:09 PM

Carth: Samsung made over 19 billion in profit last year with over 6 billion coming from the US market. They have 35 billion in cash on hand. You really think it would be a good idea to lose access to the US market and have their assets seized to send a message to apple when their profits from a single quarter in the US cover the entire judgement?


Well, to be fair, I am advocating an exit from the US market rather than the crazy "shut down all iPhones" thing from up-thread; I just bounced off of that to get started.

That said, sacrificing one-third of your business to exit from a demonstrably hostile market? Yeah, I think it's probably a good idea to start scaling back here with that strategy in mind.
 
2012-08-27 04:41:36 PM

LasersHurt: opiumpoopy: It's the US consumer who will end up suffering if Apple do get Samsung's products taken off sale. Yay to you all.

Yes, one or two models of Samsung off the market will surely make us suffer.


Apple just announced 8 Samsung phones they want off the market. Its pretty much all of the Galaxy SII line. Seeing as they're now on the SIII which is doing very well and doesn't seem to violate any of Apple's 'patents', I think we're going to be ok.
 
2012-08-27 05:26:57 PM

opiumpoopy: Great Janitor: wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...

Or, they could have just made their operating system look less like Apple's operating system.

In most countries, to be upheld a patent needs to be both 'novel' and 'innovative'.

iOS was/is pretty novel and innovative. However, nothing about the APPEARANCE is close to either test for a patent to be valid... in most countries. Which is why the courts in every other major country have told Apply to go f*** themselves when trying to uphold the same patents.

Only in the US can you patent 'a method for cleaning your ass with soft paper' and then sue anyone who tries to do so without paying royalties.

Samsung just forgot THAT.

It's the US consumer who will end up suffering if Apple do get Samsung's products taken off sale. Yay to you all.


I thought both sides got slapped with copying the other side to a degree in Korea, sorry to let facts intrude.

Did you feel the same fake outrage when Nokia sued Apple over the iPhone stuff?
 
2012-08-27 05:49:26 PM

Great Janitor: wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...

Or, they could have just made their operating system look less like Apple's operating system.


Or apple could you know, advertise why theirs is better and compete on the open market instead of using the government to shut down competition.
 
2012-08-27 05:51:44 PM

Warlordtrooper: Great Janitor: wmoonfox: way south: In samsungs position, I would have done more to make my product distinct somehow.

Like white rectangles? Apple owns those, too. In fact, they seem to be implying that they own corners altogether, since neither their actual product nor the Samsung product incorporated the dimensions or angles set forth in the design spec. I guess it's circles for the rest of us from now on...

Or, they could have just made their operating system look less like Apple's operating system.

Or apple could you know, advertise why theirs is better and compete on the open market instead of using the government to shut down competition.


Don't be obtuse.
 
2012-08-27 06:10:55 PM

wildcardjack: Samsung went with the wrong approach in court.

"Tell me, Mr Apple, where are your factories? Oh, you don't actually have any factories. Okay, then who makes your parts? Hmmm, would it therefore be fair to say that Apple iProducts are mainly Samsung devices rebuilt to Apple's iOS specifications?"

Case over six months ago.


That's like saying the man you hired to cook your burgers with your secret sauce is entitled to sell them as his own because you don't currently have a health card.

Like it or not, it was apple that created the market for these consumables with its iProducts. If Samsung didn't want the chip business, I doubt they'd be impossible to replace.
It would hurt Apple, but it would hurt Samsung more if their other customers got skittish.
 
2012-08-27 06:38:24 PM

way south: That's like saying the man you hired to cook your burgers with your secret sauce is entitled to sell them as his own because you don't currently have a health card.


It's more like saying it's a secret sauce but it's really Kraft thousand island dressing. And you don't even make the burgers. Or cook the buns. You just designed the arraignment of buns and meat, so the only way someone could compete in making burgers would be to not make burgers.

I should go and patent the hamburger and see if I can properly troll the patent. If someone can patent the zip-line 400 years after it's invention I don't see why I can't patent the layering of bread, meat, cheese and other toppings.
 
2012-08-27 07:12:48 PM

wildcardjack: way south: That's like saying the man you hired to cook your burgers with your secret sauce is entitled to sell them as his own because you don't currently have a health card.

It's more like saying it's a secret sauce but it's really Kraft thousand island dressing. And you don't even make the burgers. Or cook the buns. You just designed the arraignment of buns and meat, so the only way someone could compete in making burgers would be to not make burgers.


No, it's not. You're shifting your goal posts from an argument about Samsung making the phones according to Apple's designs to one about how the designs should never have been patentable. Maybe that's what you intended to argue, but it's not where you started.
 
2012-08-27 08:23:25 PM

dragonchild: Unique, probably not. But even if Apple started working on changing suppliers today, they probably have bonded stock they need to go through. Meanwhile, it'd take as much as a couple years to find and qualify a company, hammer out a contract, build up capacity and then set up the process. The equipment is probably the same stuff used to make any processor, but they're wicked expensive so it's not like even a Tier-1 supplier has all that excess capacity lying around.


Apple started qualifying TSMC (Taiwan Semiconductor Manufacturing Company) quite some time ago.

Chip manufacturing fabs are incredibly expensive and Apple happens to be one of the few companies who could afford to build one just as advanced as those used by Intel out of petty cash. However, what Apple much prefers to do is to is allow someone else to build their components while they just finance the development of what they want and pay for the equipment needed to build it in exchange for exclusivity.

The CEO of TSMC recently had some very interesting things to say:

Q: (Heyler) Did you think you need to dedicate some times to product specific areas that are very high volume?

A: (Chang) Actually yes. I think that's almost a natural outcome the way market is trending. I think that they are going to be larger customers, and now it makes complete sense to dedicate a whole fab to just one customer and hold that - to hold fabs in fact to just one customer.


This is exactly the kind of deal Apple likes. They spend some of their cash horde and gain access to advanced manufacturing technology that none of it's competitors will have access to.

From Apple's perspective, a deal like this makes a tremendous amount of sense. Apple and Samsung clearly haven't mended their fences; the enmity between the two companies' is high enough that we're surprised they haven't broken manufacturing ties already. The Cupertino-based company can easily afford a massive investment in TSMC, particularly when said cash would buy access to a next-generation process node and a production guarantee. Apple has a long history as an early adopter of technology and strongly prefers to launch products based on that perception.

As for TSMC, an agreement of this sort would win it additional capital for investment and possibly accelerate its node deployments. Investors are clearly concerned about the amount of money the company spends on capital expenditures, and while Chang handled the questions adroitly, the foundry plans to introduce FinFET designs at 16nm and EUV at the 10nm node. Both of these technologies are significant changes that could prove difficult to adopt -- EUV (Extreme UltraViolet lithography) remains deeply problematic even after years of research.


Samsung is far from the only contract chip manufacturer in town. Apple can easily move away from them, and TSMC would be a logical choice.

Also, don't forget that Intel recently commented that they would be willing to fab ARM based chips for Apple, although they would obviously prefer that Apple use X86 architecture instead of ARM. This makes perfect sense because Intel stands to loose it's largest advantage if TSMC can suddenly afford to build the sorts of super advanced chip fabs Intel can.
 
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