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.

Top Rated Comments

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101 months ago

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".

That's the lesson Apple needs to learn. Samsung produces everything from LCDs to NAND and SoCs which makes them independent, whereas Apple doesn't own a single factory. Without Samsung, Apple couldn't make a single iPhone or iPad but Samsung would do just fine without Apple, so who is feeding who?
Score: 59 Votes (Like | Disagree)
Avatar
101 months ago
Hey Tim, how's Apple's thermonuclear war going?
Score: 42 Votes (Like | Disagree)
Avatar
101 months ago
At some point Apple will just find a new supplier and it'll hurt Samsung more in the end.

Good job.
Score: 38 Votes (Like | Disagree)
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101 months ago
got to get that $1 Billion back some how!
Score: 28 Votes (Like | Disagree)
Avatar
101 months ago
This makes Apple more likely to hasten their move away from Samsung. if this rumour is true. And Apple away from Samaung = $0 for Samaung as they won't be buying parts from Samsung anymore.

Lesson Samsung needs to learn.
"Don't bite the hand that feeds you cause one day the hand will stop feeding you if you keep biting it".
Score: 26 Votes (Like | Disagree)
Avatar
101 months ago
Samsung and Apple should buy a kitten together.
Score: 25 Votes (Like | Disagree)

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