Samsung Reportedly Hits Apple with 20% Price Increase for iOS Device Chips
MarketWatch reports on an article from Korean newspaper Chosun Ilbo claiming that Samsung has hit Apple with a 20% price increase on the A-series chips used to power Apple's iOS devices.
"Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor," the person was quoted as saying in the report. "Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)"
The two firms have started to reflect the new supply price recently, the report added, citing the same person.
While Apple's latest A6 and A6X chips are custom designs from the company's in-house chip team, Samsung continues to serve as the foundry for manufacturing the chips used throughout Apple's iOS device lineup.
A bill of materials estimate for the iPhone 5 pegged the cost of the A6 chip at approximately $17.50, meaning that a 20% increase in price would translate to roughly $3.50 in increased costs per unit for Apple.
Apple has been reported several times in recent years to be attempting to move chip production to TSMC, but so far the company has been unwilling or unable to make the switch. TSMC's upcoming 20-nanometer process targeted for mass production in late 2013 could, however, serve as a catalyst for a move.
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