Looks like Apple’s relationship with Samsung has reached new lows, with a new report out of Korea describing it as having moved from “love hate” to “hate hate”.
According to the Korea Times, the relationship between the two companies has become “one-dimensional” as Apple looks to move its semiconductor business away from Samsung. While the Korean company is still manufacturing the A6 chips used in the iPhone 5, Apple is no longer using Samsung’s technology to build them.
“Samsung’s agreement with Apple is limited to manufacturing the A6 processors. Apple did all the design and we are just producing the chips on a foundry basis,” a senior Samsung official said.
While all of this seems like the court room bickering between the two companies taken to another level, it’s worth bearing in mind that it could have serious business implications.
“It appears that Samsung is losing its multibillion dollar partnership as Apple has been its biggest parts client,” said Park Hyun a senior analyst at Tongyang Securities.
The relationship between the two companies extends back to the early 2000s, with the Korean giant having been involved in the design of all of Apple’s A range of chips.
That deal has changed significantly. “There are three kinds of chip clients. Some want us to handle everything from chip design, architecture and manufacturing. Some want us to just design and manufacture. Some want us to just make the chips. Apple is now the third type,” a source at Samsung said.
One of the most obvious signs of the rift was the recent move of top Samsung semi-conductor designer Jim Mergard to Apple.
“The high-profile hiring of someone like Mergard directly from a big rival no doubt increases mutual tension. Apple wants to internalize its management, even for application processors, and to lower its dependency on Samsung for those logic chips,” the source said.
“Apple is threatened by Samsung’s rapid rise. Apple is excluding it from major projects. However, it can’t completely wipe Samsung from its business partner list,” another Samsung official said.
Although losing Apple will be a significant loss to its chip-making division, any moves by the Cupertino-based giant to move further away from Samsung are unlikely to affect the company’s mobile division, given that it is now the world’s number one smartphone manufacturer.