iPhone 5: Apple (AAPL) Slashes Samsung Memory Chip Order

Apple (AAPL), Samsung’s Nr.1 customer, buying billions of dollars worth of components for its popular iPhone, iPad and Mac product lines, has decided to cut its dependence on its courtroom foe and competitor, according to industry sources.

South Korea’s Samsung is one of Apple’s core suppliers, rolling out microprocessors, flat screens and memory chips — both DRAM and NAND — for Apple’s bestsellers such as the iPhone, iPad and iPod, but the Cupertino-based tech giant has been reducing its Samsung orders in an effort to diversify its memory chip supply lines, according to a Reuters source who also says that while the reduction of chip orders for the iPhone sends a signal that Apple intends to diversify, Samsung remains on Cupertino’s list of initial suppliers for future iOS-powered devices.

“Samsung is still on the list of initial memory chip suppliers (for new iPhones). But Apple orders have been trending down and Samsung is making up for the reduced order from others, notably Samsung’s handset business,” the Reuters source said.

Meanwhile, the Korea Economic Daily reported that Apple had totally dropped Samsung from its list of memory chip suppliers for the first batch of the new iPhone, the iPhone 5, choosing instead to go with Toshiba, Elpida Memory, and Korea’s SK Hynix.

Needless to say, this might affect Samsung’s stock and balance sheet negatively considering how Apple’s orders are no small change. The company spends $28 billion a year buying semiconductors for the millions of tablets, smartphones and computers it produces, making it the world’s largest buyer of silicon, according to estimates released from research firm IHS iSuppli.

Reuters also said Apple’s decision was not related to the recent courtroom clashes between the two tech giants. The reality however, seems to suggest otherwise as the global patent war between both companies is clearly now spilling over into their business relationship.

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1 Comment on iPhone 5: Apple (AAPL) Slashes Samsung Memory Chip Order

  1. It’s not Apple taking it’s business away from Samsung.

    It’s Samsung refusing to supply Apple RAM chips and display panels for the first batch of the iPhone 5!

    Big difference and this is going to hurt…coming just 3 days before the big launch.

    This is why Apple is trying to put a spin on this and try to turn it the other way round to reduce the damage to its stock value when the markets reopen Monday.

    Check with Bloomberg before you make more mistakes with this story!!!

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