MarketWatch is reporting on an article from Chosun Ilbo, a Korean newspaper, that Samsung has raised their prices of the A-series chips used in Apple’s iOS devices, by 20%. The report goes on to say that Apple at first refused the price increase, but could not find a replacement supplier to pick up the slack, so Apple acquiesced.
Even though Apple’s latest chips, the A6 and A6X are custom designed chips from Apple’s in-house engineers, Samsung is the manufacturing muscle behind these chips. Some of the tear downs of the iPhone 5 have suggested that the price of the A6 chip is $17.50 per chip, and a 20% increase would work out to be an additional $3.50 per unit.
I would wager that Apple is frantically looking to find someone, anyone, that could take over the manufacturing responsibilities for their A-series chips. If it isn’t overtly obvious by now, as Apple’s manufacturing partner, Samsung has taken Apple’s designs in some form or fashion, from many of their components, weaponized it, and are now using them as a competitive threat against Apple. If for no other reason than self-preservation, Apple needs to get away from Samsung.