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(Tech Crunch)   Apple: Samsung, pay us for court settlements Samsung: 20% price increase on mobile processors seems fair about now   (techcrunch.com ) divider line
    More: Obvious, Apple Inc., Samsung, court settlements, ipad mini, processors, mobile processors  
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5142 clicks; posted to Geek » on 12 Nov 2012 at 2:25 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-11-12 02:29:05 PM  
HA-HA.jpg
 
2012-11-12 02:31:20 PM  
Apple doesn't play well with others.
 
2012-11-12 02:36:09 PM  
Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.
 
2012-11-12 02:41:21 PM  
i.imgur.com 
Time for Apple to take its medicine again.
 
2012-11-12 02:42:16 PM  

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


Know how I can tell you're a gentile?

Because then you lose out on a bunch of potential sales. I'd do exactly what Samsung is doing. Raise prices just as high as I could under the current contract while telling my sales team their new mission is finding business to replace them at the end of the contract.

That way Apple gets your middle finger, but you also walk away with a bunch of their cash. Oh, and anything Apple wanted to buy from me in the future would be a little pricier too. That's the cost of doing business like a dick.
 
2012-11-12 02:42:57 PM  

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


Cause there's no other buyer for the already-made chips, or the entire manufacturing output.

That would be cutting off Samsung's nose to spite Apple, Apple would just throw it back while Samsung shouts FOR EDITH.

/Obscure?
 
M-G
2012-11-12 02:44:48 PM  

mongbiohazard: Because then you lose out on a bunch of potential sales. I'd do exactly what Samsung is doing. Raise prices just as high as I could under the current contract while telling my sales team their new mission is finding business to replace them at the end of the contract.


And they already know that Apple is looking to get someone else to fab their chips, so you may as well milk them for all you can now.
 
2012-11-12 02:49:09 PM  
Only 20%? I would have made it 50!
 
2012-11-12 02:55:08 PM  
Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?
 
2012-11-12 02:59:17 PM  

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?



You are the first paid shill to show up.
 
2012-11-12 03:05:28 PM  

Martonio: Only 20%? I would have made it 50!


One biiiiillion dollars.
 
2012-11-12 03:08:03 PM  
Don't get so lost in the nebula of hating Apple that you forget why Apple is getting shiattier. Locking devices down like that should be criminal.
 
2012-11-12 03:11:29 PM  
I called this a month ago. A guy I know said I was dead wrong, Samsung would *never* do that.

Honestly? I wouldn't be shocked if Samsung jacked their prices even farther just to see how much Apple with pay. If Apple went ahead and said "fark you" to Samsung, it could effectively mean the end of a lot of support for any Apple product with the Samsung chip in it once new products come out by not just Apple, but developers as well. With Apple's strategy of "buy a new product every few months or else you're an out of touch tool" pushing users to always buy the latest and greatest, there's no reason to think they will support even current tech once they roll out new processors, and developers won't bother writing programs that will run on them either, especially if Samsung is smart and won't license the tech to another company to make processors that are compatible with current apps. That lawsuit will end up costing Apple a lot more than bad PR and time spent.

Quick, Samsung! Put through a patent with chipsets having square corners!!!!
 
2012-11-12 03:21:11 PM  

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?


Projecting: It's not just for movie theatres.
 
2012-11-12 03:24:27 PM  
Hay guyz, Apple is to blame for everything.
 
2012-11-12 03:28:03 PM  

bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?


Yes. It's the ANTI-APPLE crowd that is full of paid shills. Yessirreee...
 
2012-11-12 03:50:29 PM  
Wait. Samsung makes shiat for apple iOS devices?
 
2012-11-12 03:55:52 PM  

SacriliciousBeerSwiller: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

Yes. It's the ANTI-APPLE crowd that is full of paid shills. Yessirreee...


It has to be either money or just stupidity that has people white-knighting a corporation like Samsung. Its history and business practices make Apple look like [fill in the blank with a company that practices good citizenship].
 
2012-11-12 03:55:54 PM  

Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.


What is to stop Apple from giving them the finger and getting processors from someone else for their next generation of iStuff? Don't forget Motorola's experience.
 
2012-11-12 03:58:45 PM  

TheTrashcanMan: Wait. Samsung makes shiat for apple iOS devices?


They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

Apple... really hasn't been acting terribly smart since the whole "thermonuclear war" thing.
 
2012-11-12 04:03:55 PM  

Crotchrocket Slim: Warlordtrooper: Why not just refuse to sell to them. In fact sell to their competition instead.

Thats what I would do if you sued me.

What is to stop Apple from giving them the finger and getting processors from someone else for their next generation of iStuff? Don't forget Motorola's experience.


This is exactly whats happening. Samsung said we are not selling to you past this contract, oh by the way, the price is going up. So apple said FARK YOU were taking our ball and going ... ohh these guys dont make the chips we need... ohhh neither do these guys .. or them... or these ones either... and it would cost us 50 times that to start up our own chips company ... fark it and went back check in hand to samsung and sucked up their spooge.

Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.
 
2012-11-12 04:07:52 PM  

TheTrashcanMan: Wait. Samsung makes shiat for apple iOS devices?


Apple bit the hand that fed them, hard. They won in a court here, but since then, have been forced by an international court to have a public apology on their website to Samsung, have had a shiatload of bad PR, fired two top executives and are starting to see what biting the hand that feed their products does. Their stocks are so unstable and people so nervous about them that they had their prices drop almost $40/share in two days because a guest on CNBC declared they "lost their mojo". The products they are recently releasing are things that Jobs was vehemently against (7" tablets? Never in his company), and the even their marketing for those is weak sauce compared to how they used to glamorize their product lines (according to Apple SVP of Design Jony Ive, the Mini is a completely new product and a "concentration" rather than a "reduction, going on to say "...so when we made the iPad Mini, we wanted to make sure it had all the features that make iPad so magical."). Either they are slacking hardcore in the marketing segment, or honestly believe their users are so dumb as to believe their products are magic.

Apple seems to be falling from the tree quite fast.
 
2012-11-12 04:10:18 PM  
so basically Apple isn't going to use Samsung in the future for hardware manufacturing

not sure how this whole ordeal benefits anybody, both sides are cutting their own noses to spite their faces by winning patent battles that benefits nobody and pushing away clients with price hikes

what's the future of the smartphone at this point? Samsung-Lenovo-Apple-Microsoft? each with closed patent-trolling systems? each with their own manufacturing bases in whatever tax-haven foreign country?

feels like the 90's and the PC space race all over again, at some point we reach market saturation and creativity and marketability hitting a wall and then somebody comes up with the next big thing and it starts all over again
 
2012-11-12 04:12:09 PM  

fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)


I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.
 
2012-11-12 04:18:17 PM  

RoxtarRyan: Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


They could, but they have contracts with apple, and it would reflect poorly on samsung to back out of those contracts.

The fact that Samsung is willing to continue to supply hardware as dictated in their contract shows other businesses that they can be trusted to hold up to those contracts. By jacking up the prices as much as the contracts allow, it also shows that Samsung won't take any crap. By putting up with Apples nonsense and simply charging them for it, they come away with a shining reputation and a pile of cash.
 
2012-11-12 04:20:05 PM  

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


sounds like a great reason never to do business with Samsung
 
2012-11-12 04:26:48 PM  

theflatline: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

You are the first paid shill to show up.


Just FYI:

Bingethinker = Apple Bevets or iBevets, if you prefer.
 
2012-11-12 04:32:02 PM  

AdamK: sounds like a great reason never to do business with Samsung


Or sue someone that supplies the very heart of your products for a minimum of $1B because of round corners. Biting the hand that feeds and all.
 
2012-11-12 04:36:04 PM  

RoxtarRyan: I called this a month ago. A guy I know said I was dead wrong, Samsung would *never* do that.

Honestly? I wouldn't be shocked if Samsung jacked their prices even farther just to see how much Apple with pay. If Apple went ahead and said "fark you" to Samsung, it could effectively mean the end of a lot of support for any Apple product with the Samsung chip in it once new products come out by not just Apple, but developers as well. With Apple's strategy of "buy a new product every few months or else you're an out of touch tool" pushing users to always buy the latest and greatest, there's no reason to think they will support even current tech once they roll out new processors, and developers won't bother writing programs that will run on them either, especially if Samsung is smart and won't license the tech to another company to make processors that are compatible with current apps. That lawsuit will end up costing Apple a lot more than bad PR and time spent.

Quick, Samsung! Put through a patent with chipsets having square corners!!!!


Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs. Not to mention all of the key microaechitecture is licensed from ARM and PowerVR anyway. LG is also already chomping at the bit to make displays for Apple, and flash memory is a commodity item. There's really not much Samsung can do to screw Apple over long term.
 
2012-11-12 04:36:15 PM  

poisonedpawn78:
Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.


TSMC could easily do it. But they would rather have many smaller customers than one large. If they had most of the production doing stuff for Apple they would not only be dependant on something they couldn't control, the fortunes of Apple, but Apple could also preassure them on prices, which Apple would.

So TSMC will always prefer to only be able to sell 80% of their capacity to numerous customers, than having 100% of the production sold, with 80% of that being Apple.
 
2012-11-12 04:41:31 PM  

fluffy2097: The fact that Samsung is willing to continue to supply hardware as dictated in their contract shows other businesses that they can be trusted to hold up to those contracts.


Wonder how long those'll last... Either way, I think that within the next couple years (if that), we'll see brand new Apple products with new chipsets, with either Samsung or Apple choosing not to renew. Thing is, I wonder if Apple will drop support for the older chipsets, or if they will essentially double their tech support to support both chipsets, port apps, etc. etc. They could be a hero in the long game if they decide to increase their staff to support both and hire all the workers here in the USA, touting themselves as a job creator because the big, bad foreign company isn't making their chips anymore.

Interesting to see where this leads.
 
2012-11-12 04:43:09 PM  

Mad_Radhu: Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs.


No kidding... I thought I read somewhere Samsung owns the design, etc. etc.
 
2012-11-12 04:45:59 PM  

RoxtarRyan: Quick, Samsung! Put through a patent with chipsets having square corners!!!!

RoxtarRyan: Or sue someone that supplies the very heart of your products for a minimum of $1B because of round corners.


I wonder who's paying you to push this whole "corners" meme...
 
2012-11-12 04:51:27 PM  

Mad_Radhu: Apple is designing the A-series chips, and Samsung is just fabbing them, so there is really no way they can stop Apple from using another fab for their CPUs. Not to mention all of the key microaechitecture is licensed from ARM and PowerVR anyway. LG is also already chomping at the bit to make displays for Apple, and flash memory is a commodity item.


Just to clarify for other people, Apple designed the Apple Ax (A4, A5, A6) chips. Not to be confused with the the Cortex-A series microarchitecture itself (commonly referred to as A5, A7, A8, A9, A15, etc.) For example, the Apple A4 is actually a Cortex-A9.

Mad_Radhu: There's really not much Samsung can do to screw Apple over long term.


Really? I thought it was called the Galaxy series :P
 
2012-11-12 04:51:54 PM  

Diogenes Teufelsdrockh: theflatline: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?

You are the first paid shill to show up.

Just FYI:

Bingethinker = Apple Bevets or iBevets, if you prefer.


Really? I have him just noted as "trolling bigot." Didn't know he was also an apple sodomite.
 
2012-11-12 04:52:19 PM  

Theaetetus: I wonder who's paying you to push this whole "corners" meme...


Paying? Every time someone's eyeball twitches, I get a funny feeling in my pants. Doesn't happen very often anymore, so I take what I can get.
 
2012-11-12 04:52:45 PM  

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.
 
2012-11-12 04:54:50 PM  
Apple has been in the process of moving their CPU manufacturing to Taiwan Semiconductor Manufacturing Co. for a couple of years now.

"Apple began verifying TSMC's 20nm process in August this year and may begin risk production in November with the process," the report said. "Volume production is expected to start in the fourth quarter of 2013, raising the possibility that TSMC will hike capital expenditure to US$11-12 billion in 2013 and 2014."

Reports have linked Apple to TSMC for over a year now, but the company still relies on Samsung as its sole supplier of custom chips found in the iPhone, iPad, iPod touch and Apple TV. As such, a move to TSMC as Apple's sole supplier for a future chip would represent a major shakeup in Apple's supply chain.


Apple typically fronts manufacturers the money needed for production lines to build their components in return for deep discounts. Their last financial report mentioned an unexpected Billion dollars spent on just such a deal with a manufacturing partner which was not named.

The CEO of TSMC gave an interview earlier in the year when he mentioned his companies willingness to build a state of the art Fab and devote it to one customer.

Samsung is price gouging while they can because they know they are being cut out of the equation anyway. They have nothing to lose.
 
2012-11-12 04:56:05 PM  

RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.


Many companies have the right to make LCD screens of various types, there is a whole licensing and standards alliance. I don't think Samsung currently makes screens for Apple right now with Sharp and LG doing the bulk of the supply.

You can't think of Samsung like one company. They make basically everything and have manufacturing capabilities beyond many others. Things like mobile chips, memory and screens are ALMOST a fungible commodity now. Demand is outstripping supply and that is why Samsung can justify/force a price rise.

As much as Apple would probably like to cut Samsung out they just can't replace that kind of production easily. Kind of like US reliance on foreign energy.
 
2012-11-12 04:56:09 PM  

Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


Samsung's market cap is 182b+
 
2012-11-12 04:58:25 PM  
For the record... I don't use a Samsung phone, or anything else. The only Samsung phone I had was the Charge, which was the biggest POS. Bluetooth was complete shiat (kept dropping connection every 15-20 minutes, requiring a re-pairing.. a biatch when you stream music through your phone to your car stereo and you had a 40 minute drive to college and work), and the GPS sensor was the worst I've seen, taking upwards of half an hour to lock onto a signal (confirmed by using 3rd party apps that it was just not locking). At the time, those issues were a problem across the Samsung product line, with Verizon and Samsung being aware of the problem and doing nothing about it, leading me back to getting a Motorola Bionic.

I'm just happy to see Apple getting slapped around a bit.
 
2012-11-12 05:00:59 PM  

ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+


True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.
 
2012-11-12 05:02:09 PM  

Faddy: You can't think of Samsung like one company. They make basically everything and have manufacturing capabilities beyond many others. Things like mobile chips, memory and screens are ALMOST a fungible commodity now. Demand is outstripping supply and that is why Samsung can justify/force a price rise.


Samsung is the company with the largest number of it's own parts in it's laptops and devices. Their laptops are over 80% Samsung with the CPU, Intel or AMD, being the biggest part they don't make
 
2012-11-12 05:02:17 PM  

Carth: ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+

True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.


They usually don't spend 100% of their cash on hand either, do they?
 
2012-11-12 05:07:08 PM  

Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


Buying a company that does something completely different from anything your company does is a terrible idea, even if they had the money to do it (and no, Apple doesn't have the cash.)

Do you think it would be wise for Dominos pizza to Buy out the company that makes their ovens and go into the oven making business just because they had a personal vendetta against their oven supplier? What does a pizza company know about making ovens?
 
2012-11-12 05:07:24 PM  

ProfessorOhki: Carth: ProfessorOhki: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Samsung's market cap is 182b+

True, but companies generally don't spend 100% of someones market capitalization when performing a takeover.

They usually don't spend 100% of their cash on hand either, do they?


Of course not. Especially when you consider a 20% increase is equal to about $3.50 a device and in 10-12 months they'll likely be able to move over to TSMC. The loss of Apple as a long term client hurts Samsung more than a sub $4 increase hurts apple for less than a year.
 
2012-11-12 05:09:20 PM  

Faddy: As much as Apple would probably like to cut Samsung out they just can't replace that kind of production easily. Kind of like US reliance on foreign energy.


Apple can and does pay for the factories it's manufacturing partners run to build the components Apple wants.

For instance, this is from the last fiscal year's financial report: The Company's capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure.

Apple has the cash on hand to very easily replace the factories they previously built for Samsung.

I would expect that by the time Apple's current manufacturing contracts with Samsung are up, they will have other facilities ready to go.
 
2012-11-12 05:13:14 PM  
Great job biting the hand that feeds, Apple.
 
2012-11-12 05:17:19 PM  

Carth: RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.

Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


That's why this is in the Geek tab, not the Business tab.

Geek logic: "Arrggh, I hate Apple, so I support anything that hurts them, even if only temporarily."

Business logic: "Apple is costing us a lot of money and this patent battle is a war of attrition with a much larger, cash-rich company. Let's do what we legally can to offset those costs while we figure out what to do when the supplier agreement is over in 2014."

Apple will be just fine. Samsung will be just fine. It's just going to reshape their balance sheets for a few quarters while they adjust to the new normal. When the dust settles, Sharp and LG will be the winners, along with a few fabs. I even doubt that Apple would pull 100% of the processor supply business from Samsung; it'll just be a lot lower than the "over 200 million processors" Samsung builds for them now.
 
2012-11-12 05:17:33 PM  

Carth: Of course not. Especially when you consider a 20% increase is equal to about $3.50 a device and in 10-12 months they'll likely be able to move over to TSMC. The loss of Apple as a long term client hurts Samsung more than a sub $4 increase hurts apple for less than a year.


Also, let's face it, people expect to pay a gazillion dollars for an apple device. If the next iWhatever is about 150% as much as it should be if it didn't have the apple logo on it, that's just par for the course. I don't think the average apple consumer would even bat an eye at a $40 increase.
 
2012-11-12 05:25:24 PM  

BullBearMS: I would expect that by the time Apple's current manufacturing contracts with Samsung are up, they will have other facilities ready to go.


Sounds like they prepared for the fallout...
 
2012-11-12 05:26:18 PM  
 
2012-11-12 05:26:54 PM  

Mitch Taylor's Bro: Sharp and LG will be the winners


Good call.
 
2012-11-12 05:27:14 PM  

BullBearMS: Apple can and does pay for the factories it's manufacturing partners run to build the components Apple wants.

For instance, this is from the last fiscal year's financial report: The Company's capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure.


I'm not completely sure, but isn't tooling and mfg process equipment part of the cost in setting up ANY [overseas] manufacturing? Even if they own the facility, that's not saying that Apple's running the line, just that a facility of their own is cheaper than line-time at normal rates. Manufacturing on that scale's got to be a fairly specialized skill. Regardless of how much money they have on hand, they're not going to just plop down some cash and match Samsung's fab capabilities.

Hmm, I do wonder what will happen to Samsung's US-based fabs when they lose the volume though.
 
2012-11-12 05:29:33 PM  

fluffy2097: Carth: Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.

Buying a company that does something completely different from anything your company does is a terrible idea, even if they had the money to do it (and no, Apple doesn't have the cash.)

Do you think it would be wise for Dominos pizza to Buy out the company that makes their ovens and go into the oven making business just because they had a personal vendetta against their oven supplier? What does a pizza company know about making ovens?


I don't think Apple WOULD buy Samsung, but having $120 billion (or whatever Apple's actual cash holdings are) in the bank means they have some maneuvering room. They could explain any supplier difficulties by saying "The development of the A8x chip (or whatever it would be) is not ready, so we're going to delay the iPhone 7S six months" and maybe lose a little shareholder value while new fab lines get up to speed.
 
2012-11-12 05:32:03 PM  

RoxtarRyan: Mitch Taylor's Bro: Sharp and LG will be the winners

Good call.


Meh, it was part of the original article :-)
 
2012-11-12 05:34:28 PM  

ProfessorOhki: Hmm, I do wonder what will happen to Samsung's US-based fabs when they lose the volume though.


One of the things Google likes to tout is that the Nexus 7 is it was built here in the US. They may want to contract something with them, even if only to use their facilities, to keep that selling point up.
 
2012-11-12 05:35:55 PM  
Not surprised considering for the short term Apple is locked into using Samsung's chips. This, and the Nexus 10 was created in partnership with Samsung and is the first tablet with an A15 processor so it looks like Samsung is growing their processor business.
 
2012-11-12 05:37:50 PM  

RoxtarRyan: BullBearMS: I would expect that by the time Apple's current manufacturing contracts with Samsung are up, they will have other facilities ready to go.

Sounds like they prepared for the fallout...


RoxtarRyan: BullBearMS: I would expect that by the time Apple's current manufacturing contracts with Samsung are up, they will have other facilities ready to go.

Sounds like they prepared for the fallout...


I believe that the move to TSMC started as the normal sort of "we need a second source for manufacturing this component" sort of deal, but once Samsung decided to start screwing over it's biggest customer, all bets were off.

I understand that both Apple and Qualcomm tried to completely book all TSMC's manufacturing capacity earlier in the year and were rebuffed. I'm afraid Apple is just going to have to front TSMC the money to build an Apple dedicated Fab and wait for it to be built before they get the amount of capacity they want.

Meanwhile, Intel also mentioned their willingness to fab chips of other people's design earlier in the year, which makes sense when you consider how little Intel wants other semiconductor manufacturers to have enough cash to catch up to Intel's manufacturing process advantage.
 
2012-11-12 05:38:45 PM  

ProfessorOhki: BullBearMS: Apple can and does pay for the factories it's manufacturing partners run to build the components Apple wants.

For instance, this is from the last fiscal year's financial report: The Company's capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure.

I'm not completely sure, but isn't tooling and mfg process equipment part of the cost in setting up ANY [overseas] manufacturing? Even if they own the facility, that's not saying that Apple's running the line, just that a facility of their own is cheaper than line-time at normal rates. Manufacturing on that scale's got to be a fairly specialized skill. Regardless of how much money they have on hand, they're not going to just plop down some cash and match Samsung's fab capabilities.

Hmm, I do wonder what will happen to Samsung's US-based fabs when they lose the volume though.


Yes, it would take a while to build and qualify a semiconductor fab. I suppose Apple could just buy one, but I don't know if it's in their best interests.

It's been a while since I was up to speed with the semiconductor fab business, but "fabless" semiconductor companies were starting to be popular when I was getting out of it in the late 90's. Fabs themselves are highly specialized facilities, so companies like TSMC provide the equipment and manufacturing expertise while "fabless semiconductor companies" provide the IP and buy time and capacity from the fabs. IIRC, Intel is big enough that they can support both fabs and IP, but more companies are going to a split model and falling on one side or the other.
 
2012-11-12 05:39:20 PM  

Mitch Taylor's Bro: I don't think Apple WOULD buy Samsung, but having $120 billion (or whatever Apple's actual cash holdings are) in the bank means they have some maneuvering room. They could explain any supplier difficulties by saying "The development of the A8x chip (or whatever it would be) is not ready, so we're going to delay the iPhone 7S six months" and maybe lose a little shareholder value while new fab lines get up to speed., but partner it with an aggressive marketing campaign stressing "iPhone 7S, it's worth the wait" and featuring news coverage of that one guy who that's been waiting in line 6 months. The main talking point wouldn't be how they farked their supply chain but how, "Apple won't release a product until they're really confident in it... because they care about quality and the consumer." Record first-week sales and profits.


FTFA
 
2012-11-12 05:43:49 PM  

BullBearMS: Mercutio74: Also, let's face it, people expect to pay a gazillion dollars for an apple device.

Actually, Microsoft's profit margin for Surface is much higher than Apple's profit margin on iDevices.

Microsoft (NAS: MSFT) will apparently be sitting pretty if its new tablet is a hit. The crafty deconstructionists at IHS iSuppli took apart the Microsoft Surface to value each of its components, and the results are surprising. Just $284 in components and manufacturing costs go into making the $599 tablet with its attachable keyboard cover.

By IHS iSuppli's math, that makes the Surface more profitable -- with a 53% profit margin -- than Apple's (NAS: AAPL) industry-leading iPad.


For what it's worth, I don't see why anyone would buy Microsoft hardware (except for possibly an XBox 360) either.
 
2012-11-12 05:59:27 PM  

Satanic_Hamster: Really? I have him just noted as "trolling bigot." Didn't know he was also an apple sodomite.


If you want to get technical, he's really more of a catamite.
 
2012-11-12 06:00:36 PM  

RoxtarRyan: AdamK: sounds like a great reason never to do business with Samsung

Or sue someone that supplies the very heart of your products for a minimum of $1B because of round corners. Biting the hand that feeds and all.


i have little sympathy for a company that has 1/50th the creativity of Microsoft or Sony or Apple and whose entire strategy is price competition

/never been impressed by anything Samsung makes
//has an iphone, would love to get a windows phone
 
2012-11-12 06:00:36 PM  

Carth: RoxtarRyan: fluffy2097: They make the processors and chipsets. The very heart of iOS devices. I believe they used to make apples displays as well. (but don't quote me on that)

I believe they do, yes. So, technically, doesn't Samsung have a bit of say in that whole "Retina Display" thing as well?

Christ... they can cripple Apple if they pull their tech out and say "fark off". It'll financially hurt Samsung in the short run, absolutely, but they could very well end the entire Apple mobile product line in one fell swoop.

Except the fact Samsung is a publicly traded company and that would piss off their share holders. And the fact Apple has enough cash on hand to buy Samsung. Pissing off a company with 120 billion cash on hand is usually a bad idea.


Don't be ridiculous. Apple can't take over Samsung. It would be by far the largest hostile takeover ever. The Koreans would never allow it and Apple's investors would think that the management has gone nuts.
 
2012-11-12 06:05:42 PM  

ProfessorOhki: BullBearMS: Apple can and does pay for the factories it's manufacturing partners run to build the components Apple wants.

For instance, this is from the last fiscal year's financial report: The Company's capital expenditures were $10.3 billion during 2012, consisting of $865 million for retail store facilities and $9.5 billion for other capital expenditures, including product tooling and manufacturing process equipment, and other corporate facilities and infrastructure.

I'm not completely sure, but isn't tooling and mfg process equipment part of the cost in setting up ANY [overseas] manufacturing? Even if they own the facility, that's not saying that Apple's running the line, just that a facility of their own is cheaper than line-time at normal rates. Manufacturing on that scale's got to be a fairly specialized skill. Regardless of how much money they have on hand, they're not going to just plop down some cash and match Samsung's fab capabilities.

Hmm, I do wonder what will happen to Samsung's US-based fabs when they lose the volume though.


I'm not aware of any company except Apple that pays in advance to build the factories it's manufacturing partners then run. Normally, the component manufacturer pays for their own factory and charges a higher rate for the components they build to make up for it.

As far as manufacturing chips goes, TSMC's process is more advanced than Samsung's, so Apple is trading up here.
 
2012-11-12 06:28:44 PM  

BullBearMS: I'm not aware of any company except Apple that pays in advance to build the factories it's manufacturing partners then run. Normally, the component manufacturer pays for their own factory and charges a higher rate for the components they build to make up for it.


Er, I wasn't saying that paying to build a factory was normal. I was saying that paying for things like tooling was. I can't think of anyone else with that volume of custom chips, so I don't really have anyone to compare them to in that aspect.
 
2012-11-12 07:11:32 PM  
Samsung by virtue of making actual finished products on their own, isn't particularly worried if someone goes elsewhere for some parts. They have the means to come up with their own stuff to sell, so it's not like having more chips on hand all of a sudden is a problem. Plus plenty of other people they sell to besides Apple.
 
2012-11-12 07:21:50 PM  

WhyteRaven74: Samsung by virtue of making actual finished products on their own, isn't particularly worried if someone goes elsewhere for some parts. They have the means to come up with their own stuff to sell, so it's not like having more chips on hand all of a sudden is a problem. Plus plenty of other people they sell to besides Apple.


No business in their right mind wants to lose their largest customer.

Apple was Samsung's largest customer.
 
2012-11-12 07:48:54 PM  

ProfessorOhki: Mitch Taylor's Bro: I don't think Apple WOULD buy Samsung, but having $120 billion (or whatever Apple's actual cash holdings are) in the bank means they have some maneuvering room. They could explain any supplier difficulties by saying "The development of the A8x chip (or whatever it would be) is not ready, so we're going to delay the iPhone 7S six months" and maybe lose a little shareholder value while new fab lines get up to speed., but partner it with an aggressive marketing campaign stressing "iPhone 7S, it's worth the wait" and featuring news coverage of that one guy who that's been waiting in line 6 months. The main talking point wouldn't be how they farked their supply chain but how, "Apple won't release a product until they're really confident in it... because they care about quality and the consumer." Record first-week sales and profits.

FTFA


IIRC, Lexus had a similar crisis/opportunity. They issued a recall really close to their launch. It probably cost them a pretty penny, but lent credibility to the tagline, "The relentless pursuit of perfection." They seemed to do okay afterward, so it wouldn't be the worst approach to take given the circumstances. And as a holder of an insignificant number of Apple shares, I would be okay with this kind of spin :-)
 
2012-11-12 07:52:14 PM  

BullBearMS: No business in their right mind wants to lose their largest customer.


True as far as it goes usually, but it's not like Samsung can't make up for it.
 
2012-11-12 07:55:35 PM  

BullBearMS: No business in their right mind wants to lose their largest customer.


True, but when you sell a product directly that outsells your largest competitor... Maybe Samsung has some card up their sleeve, because both parties (Apple, Samsung) both must've seen this coming a mile away.
 
2012-11-12 07:55:41 PM  
It says they're looking into other manufacturers, but those vendors ought to be looking at Samsung and thinking to themselves, "Well it looks like Apple is willing to pay 20% more, maybe we should up our asking price..."
 
2012-11-12 08:06:13 PM  

WhyteRaven74: BullBearMS: No business in their right mind wants to lose their largest customer.

True as far as it goes usually, but it's not like Samsung can't make up for it.


Roughly ten percent of Samsung's total profit came from Apple. This is despite Samsung having it's fingers in a hell of a lot of pies.

That's a lot to make up for.
 
2012-11-12 08:06:18 PM  
If Apple has their own ARM designs, why wouldn't they just work with some other fab to print these things?
 
2012-11-12 08:14:30 PM  

BullBearMS: WhyteRaven74: BullBearMS: No business in their right mind wants to lose their largest customer.

True as far as it goes usually, but it's not like Samsung can't make up for it.

Roughly ten percent of Samsung's total profit came from Apple. This is despite Samsung having it's fingers in a hell of a lot of pies.

That's a lot to make up for.


It is, but Samsung is looking to other customers to make up for it:

"Although Apple has excluded Samsung from key projects, we're not too worried as Samsung is selling more custom chips to other major companies such as Qualcomm and Nvidia," said the [unnamed] official.

Now, whether that's truth or bravado...only Samsung knows for sure. Also unknown is whether or not they're making as much money from Nvidia and Qualcomm sales as they did from Apple.
 
2012-11-12 08:19:29 PM  

AverageAmericanGuy: If Apple has their own ARM designs, why wouldn't they just work with some other fab to print these things?


They are. From the same Korean Times article I linked to above:

"A report from Barclays claimed TSMC will start producing Apple's A7 processors from the first quarter of 2014 and stressed hundreds of TSMC researchers and chip developers are currently set to produce processors that are free from Samsung patents."

TSMC = Taiwan Semiconductor Manufacturing Company. All they do is make chips for other companies.
 
2012-11-12 08:26:30 PM  

fluffy2097: Buying a company that does something completely different from anything your company does is a terrible idea, even if they had the money to do it (and no, Apple doesn't have the cash.)


The only logical purchase for apple would be if Samsung were to spin off various manufacturing divisions and focus on the consumer electronics end of things only, instead of manufacturing parts for other companies.

And that won't happen.

Now, I could see various other companies broadening their horizons, but I think Apple is "too cool" for that.
 
2012-11-12 08:29:56 PM  

AdamK: /never been impressed by anything Samsung makes


I'm not a Samsung fanboi by any means, but I'd say you should probably pay a bit more attention to the world around you.
 
2012-11-12 08:37:47 PM  

BullBearMS: That's a lot to make up for.


I'd say Samsung is in a unique position to expand other parts of their company if they do things right. Hell, how much would it take to start manufacturing a greater number of phones, tablets, and the like at various price ranges? In effect, not only directly compete with Apple products, but undercut them in price as well.

I mean, Steve Jobs is gone. Is Apple going to be able to expand into new horizons in the next 10 years as they have since the iPod? Or are they going to become what Sony became to portable music once a new standard was set for the industry?
 
2012-11-12 08:43:15 PM  

Mitch Taylor's Bro: "Although Apple has excluded Samsung from key projects, we're not too worried as Samsung is selling more custom chips to other major companies such as Qualcomm and Nvidia," said the [unnamed] official.


As I mentioned earlier. Qualcomm and Apple both tried to book the entire output from TSMC all for themselves this year and were both rebuffed.

If Samsung thinks Qualcomm wants to do business with them, Qualcomms recent actions show that they are sadly mistaken.

TSMC's manufacturing process is simply much more advanced than Samsung's. Samsung just now moved to a 28nm process while TSMC is ramping up at 20nm. By way of comparison, Intel is at 22nm now and is moving to 14nm next.
 
2012-11-12 08:52:56 PM  

BullBearMS: TSMC's manufacturing process is simply much more advanced than Samsung's. Samsung just now moved to a 28nm process while TSMC is ramping up at 20nm. By way of comparison, Intel is at 22nm now and is moving to 14nm next.


Except Samsung announced back in June they're spending $1.8B to produce their own 20nm and 14nm chipsets by 2013.
 
2012-11-12 08:57:34 PM  

RoxtarRyan: BullBearMS: TSMC's manufacturing process is simply much more advanced than Samsung's. Samsung just now moved to a 28nm process while TSMC is ramping up at 20nm. By way of comparison, Intel is at 22nm now and is moving to 14nm next.

Except Samsung announced back in June they're spending $1.8B to produce their own 20nm and 14nm chipsets by 2013.


And more recently announced that without volume customers that move didn't make sense anymore.
 
2012-11-12 09:06:21 PM  
I should also point out that Intel has publicly said the 14nm fab they are currently building is a Five Billion dollar investment.

There aren't many companies that have that kind of cash laying about available for investment.

Apple can build a Fab for TSMC in return for exclusive access to it's output out of petty cash.
 
2012-11-12 09:07:12 PM  

BullBearMS: RoxtarRyan: BullBearMS: TSMC's manufacturing process is simply much more advanced than Samsung's. Samsung just now moved to a 28nm process while TSMC is ramping up at 20nm. By way of comparison, Intel is at 22nm now and is moving to 14nm next.

Except Samsung announced back in June they're spending $1.8B to produce their own 20nm and 14nm chipsets by 2013.

And more recently announced that without volume customers that move didn't make sense anymore.


Really? Doing a quick search, they just announced 10 days ago they have their 20nm chips just about ready to go for flash memory usage, and another press release 4 days ago saying their 20nm chips are ready to go on SSD and DDR3 units.

If you could show otherwise, that'd be neat.
 
2012-11-12 09:19:21 PM  

RoxtarRyan: Really? Doing a quick search, they just announced 10 days ago they have their 20nm chips just about ready to go for flash memory usage, and another press release 4 days ago saying their 20nm chips are ready to go on SSD and DDR3 units.


You do know that building memory and building CPU's are two different things that happen in two different plants, don't you?
 
2012-11-12 09:34:32 PM  

BullBearMS: RoxtarRyan: Really? Doing a quick search, they just announced 10 days ago they have their 20nm chips just about ready to go for flash memory usage, and another press release 4 days ago saying their 20nm chips are ready to go on SSD and DDR3 units.

You do know that building memory and building CPU's are two different things that happen in two different plants, don't you?


Well then, I still haven't seen anything about them canceling their Exynos chip production plant. If anything else, Google is using Samsung in their Nexus 10 tablet, which if anything else is more than a reason to keep the plant online (since Android tablets are making decent headway against iPads). Seeing as Apple was only, what, 5% of Samsung's operating profit, it doesn't sound like a reason to cancel something right after the CES announcement regarding Google's use of the chip.
 
2012-11-12 09:40:02 PM  

RoxtarRyan: Well then, I still haven't seen anything about them canceling their Exynos chip production plant.


They are building Exynos on their current CPU process node.

It's just that TSMC is a process node ahead of them and Intel is about to be two process nodes ahead of them.

If they lack volume CPU customers to pay off the investment of a new Fab, they won't be able to catch up any time soon either.

In other holy farking shiat events...

Breaking: Windows Head Steven Sinofsky to Leave Microsoft
 
2012-11-12 09:40:05 PM  

RoxtarRyan: BullBearMS: RoxtarRyan: Really? Doing a quick search, they just announced 10 days ago they have their 20nm chips just about ready to go for flash memory usage, and another press release 4 days ago saying their 20nm chips are ready to go on SSD and DDR3 units.

You do know that building memory and building CPU's are two different things that happen in two different plants, don't you?

Well then, I still haven't seen anything about them canceling their Exynos chip production plant. If anything else, Google is using Samsung in their Nexus 10 tablet, which if anything else is more than a reason to keep the plant online (since Android tablets are making decent headway against iPads). Seeing as Apple was only, what, 5% of Samsung's operating profit, it doesn't sound like a reason to cancel something right after the CES announcement regarding Google's use of the chip.


Additionally, hell, their SIII outsold the iPhone nearly 2:1 in Q3. Why kill the plant and cease their ability to make more newer tech? I can see maybe moving the production of the plant somewhere else more beneficial to them (still haven't seen anything in regards to that, either), but with Samsung beating Apple this quarter, Google making the Nexus 10 primarily out of Samsung parts, it seems like they are doing more than well enough to not have to kill plans entirely for tech they just announced and have partnerships with.
 
2012-11-12 09:44:38 PM  

BullBearMS: RoxtarRyan: Well then, I still haven't seen anything about them canceling their Exynos chip production plant.

They are building Exynos on their current CPU process node.

It's just that TSMC is a process node ahead of them and Intel is about to be two process nodes ahead of them.

If they lack volume CPU customers to pay off the investment of a new Fab, they won't be able to catch up any time soon either.

In other holy farking shiat events...

Breaking: Windows Head Steven Sinofsky to Leave Microsoft


Huh. I must have missed his FB posting.
 
2012-11-12 09:47:25 PM  

BullBearMS: In other holy farking shiat events...


FTFA: "The move comes less than a month after Sinofsky presided over the launch of Windows 8..."

There's your sign. :)

Well, the Exynos chipsets are the smaller more efficient 20nm size... Even if they could build them in their current plant, fine, ok, but they're still making them though. I wouldn't count them out of the CPU game just yet, especially since the 16BG Nexus 10 is going for $400, a full $100 less than the $500 iPad, has higher resolution and could very well have better battery life.

Regardless, what can/will happen is purely speculation. My bet is that Samsung saw this coming a mile away, and played its cards right to make sure their impact is minimal at best, and will have a quick turnaround from their loss of Apple's contract.
 
2012-11-12 09:51:52 PM  

RoxtarRyan: My bet is that Samsung saw this coming a mile away, and played its cards right to make sure their impact is minimal at best, and will have a quick turnaround from their loss of Apple's contract.


My bet is that throwing away a customer who represents about ten percent of your total profit is completely retarded and somebodies head should roll.

Especially when that customer has been buying you the equipment to finance your expansion for some time now.

You do realize it's not in the least bit coincidental that Samsung's CPU fab is in Texas right next to Apple's chip design group, don't you? Who do you think paid for that Fab?
 
2012-11-12 09:53:09 PM  

BullBearMS: I should also point out that Intel has publicly said the 14nm fab they are currently building is a Five Billion dollar investment.

There aren't many companies that have that kind of cash laying about available for investment.


Eh, that's old news. The five billion investment was for a new 1.1 million square foot fab. Last week, they announced that they will immediately begin work on doubling the size of the new fab, plus building two more buildings, one 400,000 square feet and another 1 million square foot.


All these guys can screw around for a while over who will make the chips, but ultimately, it will come back to Intel. They were caught napping with the whole mobile device thing, but no one can match their ability to invest until they have blown everyone else out of the water.
 
2012-11-12 09:57:11 PM  

BullBearMS: Who do you think paid for that Fab?


Samsung? I hope it's Samsung... otherwise, there are a whole lot of sites that are wrong when they said Samsung invested $4B in it!
 
2012-11-12 10:03:43 PM  
 
2012-11-12 10:06:15 PM  

RoxtarRyan: BullBearMS: Who do you think paid for that Fab?

Samsung? I hope it's Samsung... otherwise, there are a whole lot of sites that are wrong when they said Samsung invested $4B in it!


And how far in advance did Apple "prepay" for the output from the plant?
 
2012-11-12 10:09:07 PM  

BullBearMS: RoxtarRyan: BullBearMS: Who do you think paid for that Fab?

Samsung? I hope it's Samsung... otherwise, there are a whole lot of sites that are wrong when they said Samsung invested $4B in it!

And how far in advance did Apple "prepay" for the output from the plant?


Oh, jeez, man, you're just asking things that no one knows the answers to now.
 
2012-11-12 10:14:31 PM  

BullBearMS: Hollie Maea: All these guys can screw around for a while over who will make the chips, but ultimately, it will come back to Intel. They were caught napping with the whole mobile device thing, but no one can match their ability to invest until they have blown everyone else out of the water.

Apple has far more cash than Intel and very recently, they haven't been at all afraid to spend it.

Note that Apple's CapEx is above that of Intel whose fab-based semiconductor production method is known as particularly capital intensive. And Intel's Capital Expenditures have been increasing to all-time highs.

If Apple spent at Google levels on server infrastructure it would only be spending a quarter of what it's actually spending. If Apple spent on production at Intel levels it would only be spending three quarters of what it's spending.

In other words, Apple is spending at the equivalent of one Intel of fabrication and one Google of server infrastructure.

[dl.dropbox.com image 526x354]


That article is "old" in that it was written before Intel's new expansion, which is 2.5 times larger than their previous biggest expenditure ever.
 
2012-11-12 10:19:58 PM  

BullBearMS: Hollie Maea: All these guys can screw around for a while over who will make the chips, but ultimately, it will come back to Intel. They were caught napping with the whole mobile device thing, but no one can match their ability to invest until they have blown everyone else out of the water.

Apple has far more cash than Intel and very recently, they haven't been at all afraid to spend it.

Note that Apple's CapEx is above that of Intel whose fab-based semiconductor production method is known as particularly capital intensive. And Intel's Capital Expenditures have been increasing to all-time highs.

If Apple spent at Google levels on server infrastructure it would only be spending a quarter of what it's actually spending. If Apple spent on production at Intel levels it would only be spending three quarters of what it's spending.

In other words, Apple is spending at the equivalent of one Intel of fabrication and one Google of server infrastructure.

[dl.dropbox.com image 526x354]


I'd have to ask what the hell they're doing with that money?

Google indexes the entire farking internet, and Intel makes like 80-90% of desktop computers (with about 3-4 different major CPU architectures: Atom, x86, x64, etc.)

Meanwhile, APL does what? Designing (not making) 1 processor, and the equivalent of Dropbox (with the cloud sync, which Google also does)? For maybe 20% of mobile and like 10% of desktops?

What on earth are they buying with 4b? Job's yacht? ... Lawyers?
 
2012-11-12 10:21:26 PM  

RoxtarRyan: BullBearMS: RoxtarRyan: BullBearMS: Who do you think paid for that Fab?

Samsung? I hope it's Samsung... otherwise, there are a whole lot of sites that are wrong when they said Samsung invested $4B in it!

And how far in advance did Apple "prepay" for the output from the plant?

Oh, jeez, man, you're just asking things that no one knows the answers to now.


For what I can only assume were tax reasons, this is how Apple structured the older deals. They would prepay for components to finance the plants to build those components.

For instance, back in 2005:

Apple to prepay $1.25B for iPod flash memory

In more recent deals, Apple just keeps the plant and equipment on their own books and depreciates them itself. Again, I'm assuming it works out better this way now for tax purposes.
 
2012-11-12 10:27:35 PM  

SleepingEye: I'd have to ask what the hell they're doing with that money?


The same as Intel. They are paying for the plants that will make components for their near future products.
 
2012-11-12 10:35:44 PM  
Samsung needs the chips for its own equipment, which they make more money on than selling the chips alone. Their phone production is limited by how many chips they can make. Samsung smartphone sales are much bigger than Apple's and their tablets are booming.They are running at full chip production capacity, but they could sell more smartphones if they could make them. So every chip they sell to Apple represents a loss of that potential income.
 
2012-11-12 10:42:12 PM  

Hollie Maea: That article is "old" in that it was written before Intel's new expansion, which is 2.5 times larger than their previous biggest expenditure ever.


Good for Intel.

I understand they are still in the running to pick up Apple's fabrication business at the 14nm node. They publicly signaled their (reluctant) willingness to manufacture other people's IP earlier in the year.

It's definitely not in Intel's best interest to let Apple funnel money into TSMC that could help finance TSMC catching up to Intel's long standing process advantage.

Apple would win by getting access to Intel's advanced process technology enabling faster/smaller/more power efficient chips. Intel would win by taking money out of it's semiconductor manufacturing competitor's pockets.
 
2012-11-12 10:43:47 PM  

jules_siegel: they could sell more smartphones if they could make them


If this were true, there would be a shortage of Samsung products on the shelves.

There is no such shortage.
 
2012-11-12 10:57:08 PM  

BullBearMS: SleepingEye: I'd have to ask what the hell they're doing with that money?

The same as Intel. They are paying for the plants that will make components for their near future products.


The difference is, they just started spending their money very recently. They have frankly been resting on their laurels way too much. Hard to say if their recent flurry of investment will be too little too late, but when you have the amount of cash on hand that they have, that means someone farked up.

But yes, we get it; they are the biggest richest bestest company evar.
 
2012-11-12 11:00:49 PM  

spawn73: poisonedpawn78:
Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.

TSMC could easily do it. But they would rather have many smaller customers than one large. If they had most of the production doing stuff for Apple they would not only be dependant on something they couldn't control, the fortunes of Apple, but Apple could also preassure them on prices, which Apple would.

So TSMC will always prefer to only be able to sell 80% of their capacity to numerous customers, than having 100% of the production sold, with 80% of that being Apple.


I seem to remember TSMC switching between being a major fab for Intel, AMD (and ATI), and Nvidia every product generation. So I'm pretty sure they are capable and fine with specializing.

/I could be misremembering this.
 
2012-11-12 11:12:21 PM  

Hollie Maea: The difference is, they just started spending their money very recently. They have frankly been resting on their laurels way too much.


No.

They have moved from being willing to allow Samsung to manufacture a majority of their components to deciding to control their own supply chain.
 
2012-11-12 11:26:39 PM  

AdamK:
/never been impressed by anything Samsung makes
//has an iphone, would love to get a windows phone


Really? This doesn't impress you?

cphoto.asiae.co.kr

Samsung makes bloody everything- they may not make the Apple's products come 2014, but there's a good chance the things will be shipped on a Samsung ship
 
2012-11-12 11:52:42 PM  

BullBearMS: In other holy farking shiat events...

Breaking: Windows Head Steven Sinofsky to Leave Microsoft


shiat. They're firing the wrong Steve.
 
2012-11-13 12:22:23 AM  

BullBearMS: Hollie Maea: The difference is, they just started spending their money very recently. They have frankly been resting on their laurels way too much.

No.

They have moved from being willing to allow Samsung to manufacture a majority of their components to deciding to control their own supply chain.


Dude, their latest big thing is a small version of a big version of the iPhone. Yes, they have been resting on their laurels.
 
2012-11-13 01:14:23 AM  

spawn73: poisonedpawn78:
Thats why they ARE looking to that Taiwanese micro processesor company to pick up the next contract. the problem was that they couldnt do it in time without a supply disruption. And the hilarious part will be in the future when the quality of the apple products drops significantly. Hearing all the hipsters claiming ITS NOT TRUEEEEEE as their 4 day old iphone bricks itself on a faulty chip.

TSMC could easily do it. But they would rather have many smaller customers than one large. If they had most of the production doing stuff for Apple they would not only be dependant on something they couldn't control, the fortunes of Apple, but Apple could also preassure them on prices, which Apple would.

So TSMC will always prefer to only be able to sell 80% of their capacity to numerous customers, than having 100% of the production sold, with 80% of that being Apple.


It's the old "sneaky hostile takeover" move. Get your supplier stretched way out on credit to meet your demand, then push prices lower and lower until they can't meet their monthly obligations, and then "rescue" them with a buyout. Not saying that Apple would do it, but that's gotta be a concern for a company smaller than Samsung. As the old-timers say, don't put all your eggs in one technology company.
 
2012-11-13 01:18:40 AM  

BullBearMS: Apple was Samsung's largest customer.


No, Samsung was Samsung's largest customer. They use more of their own component product than Apple ever did, to make complete retail products. And one of these product divisions - mobile phones - represents two thirds of the profits of the entire conglomerate.

As another said, Samsung will be fine. If Apple eats up all of TSMC's production capacity TSMC's customers will have nowhere to go but... to Samsung. And Samsung can charge them higher rates. At the same time, selling to Apple at Apple's agressive pricing will cripple Samsung's competitor TSMC's ability to do R&D and invest in increased production and new fabs. That's a win/win for Sammy.
 
2012-11-13 07:36:24 AM  

Diogenes Teufelsdrockh: Bingethinker = Apple Bevets or iBevets, if you prefer.


No, that's BullBearMS with all the inline outside quotes.

bingethinker is more like the one-liners, like winterwhile.
 
2012-11-13 07:51:35 AM  

Glockenspiel Hero: AdamK:
/never been impressed by anything Samsung makes
//has an iphone, would love to get a windows phone

Really? This doesn't impress you?

[cphoto.asiae.co.kr image 550x403]

Samsung makes bloody everything- they may not make the Apple's products come 2014, but there's a good chance the things will be shipped on a Samsung ship


I'm sure somebody makes a better ship, it's just the way things always go with Samsung :P
 
2012-11-13 11:48:32 AM  

BullBearMS: If this were true, there would be a shortage of Samsung products on the shelves.


The distribution channels are coordinated with their production capacity. They don't just make stuff and throw it out there. Demand for their smartphones is growing. They are looking at preventing future shortages. This is called planning.
 
2012-11-13 04:10:37 PM  

Bacontastesgood: BullBearMS: In other holy farking shiat events...

Breaking: Windows Head Steven Sinofsky to Leave Microsoft

shiat. They're firing the wrong Steve.


That was certainly my thought as well. People in high places are calling for Ballmer's head, so he threw them Sinofsky's head instead.

Windows 8 may be a clusterfark, but Windows 7 was not.

I'm sure forcing a tablet interface on PC's wasn't Sinofsky's idea alone. Ballmer (and Gates too, I imagine) had to have approved that.
 
2012-11-13 09:02:44 PM  
Apple is a highly valued company but they are tiny compared to samsung, it really seems stupid to mess with them.


For people who don't know samsung is a farlking massive and diversified company.
I havent looked into it (because I don't care much) but Im not sure there are many products that samsung does not make,

cars phones tires shipyards oil drilling platforms all forms of rubber steel and plastic super ocean tankers and freight ships planes military weapons robots jets computer ram put in some effort and find somethign they do not make or are not involved in.

Look here it will blow your mind
http://en.wikipedia.org/wiki/Samsung#Samsung_Air_China_Life_Insurance

they are everywhere and everything
 
2012-11-13 10:33:37 PM  

Glockenspiel Hero: Really? This doesn't impress you?


I love that someone has to pilot the S.S. Dinkov.

/"... as in, Damn, it's cold enough to freeze your..."
 
2012-11-14 01:33:23 PM  
theflatline: bingethinker: Is this where paid shills and brainwashed losers come to blame Apple for everything? What color is the sky on your planet?


You are the first paid shill to show up.


It's all he ever does. I've never seen him in a thread that wasn't Apple related, meanwhile he comes into Apple threads always taking their side no matter what, while throwing accusations of "you're an anti-Apple shill" against anyone who's not kissing Apple's ass.
 
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