Apple to Order Record $11 Bil. in Samsung Parts
The epic ongoing patent litigation hasn’t dulled Apple’s appetite for Samsung chips and state-of-the-art displays, as its orders to the Korean electronics giant are expected to approach a record $11 billion this year, according to Samsung’s recent announcement.
“The amount of the current contract is around $9.7 billion,” said a Samsung official speaking on condition of anonymity, noting that Samsung is a big beneficiary of the surging popularity of Apple products. He estimated that the demand for Apple’s i-products will likely drive up the total to $11 billion.
Apple bought $7.8 billion worth of displays, mobile application processors (APs), NAND flash chips and mobile DRAMs from Samsung in 2011, making it Samsung’s top customer. The amount of the orders are expected to keep growing at least through 2014 under the new contract negotiated last December during a visit to Cupertino by Samsung Electronics COO Lee Jay-yong for a meeting with new Apple CEO Tim Cook.
“The contract is expected to rise to $11 billion by the end of this year as Apple is planning to release a smaller iPad, probably with a 7.85-inch screen, and to sell more of its MacBook Air PCs using Samsung’s faster solid state drive (SSD) storage,” confided the Samsung source. Apple will also use Samsung chips for its new iPads using Long-Term Evolution (LTE) mobile communication technology.
The new smaller iPads will also use Samsung flat-screens utilizing new PLS-based LCD technology. It’s also negotiating to buy more Samsung LCDs for the next iPhone release later this year.
“Samsung is putting huge resources into becoming the world’s first OLED panel supplier to Apple for use in i-branded devices,” said the source. “Apple has the intent to use Samsung’s OLED technology, however, Apple doubts the output commitment for OLED screens by Samsung.”
Apple uses Samsung’s QXGA panels for its new iPad, partly because rival LG Display and Sharp aren’t ready to supply them due to manufacturing problems, said market research firm IHS iSuppli.
“We don’t see any negative impact on the partnership with Apple because of the legal issues,’’ said Samsung’s memory unit head Jun Dong-soo.