Samsung’s Business is Suffering Due to Apple’s Diversification Push

[Maura]

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We’ve been reporting for quite some time now about how Apple has been slowly but surely diversifying its supply chain, and in particular trying to get away from its over reliance on rival Samsung.


Now, according to a report on MacRumors today, it looks as though Apple’s diversification is having a very detrimental effect on Samsung’s business.


MacRumors writes that the original report in The Wall Street Journal said that Samsung has been the sole manufacturer of Apple’s Ax processor series, and the processors before that. But now Apple has employed TSMC to produce the A-series chips for the next generation of iPhones and iPads, and the WSJ says that this is hitting Samsung hard.

“Sales and profitability from System LSI (logic chip business) worsened as demand from main customers continued to decline,” said Robert Yi, Samsung’s head of investor relations.

The poor outlook for Samsung’s logic chip division has prompted some analysts, such as IBK Securities Lee Seung-woo, to predict losses of around 877 billion won ($848.5 million) for Samsung’s logic chip division in 2014, a disastrous change from 2013’s 203 billion won operating profits.


Source: http://www.macrumors.com/2014/08/05/apple-samsung-tsmc-a8-profits/

 

[Ser Aphim]

So basically one of the reasons why samsung owns this large amount of money is because apple was in a partnership with samsung to make their chips?

Well seems that ending their reliance helped apple.