Samsung Won’t Supply Apple with Chips for First Batch of iPhones

Samsung Electronics won’t be giving Apple the memory chips it needs for the first shipments of the new iPhone.  The dispute has occurred due to pricing, according to a source familiar with the situation.  Also, Samsung’s display won’t be included in the first group of new iPhones, for similar reasons.

The processor that will power the iPhone is going to be provided, however.  Snags like this one may be the reason that Applee has been spreading the wealth in its group of chip and display providers, rather than relying almost entirely on Samsung to produce most of its components.   Samsung is also the world’s largest producer of flat screens and semiconductors holding memory.

Right now, Apple and Samsung are engaged in a very complex tug-of-war, where they are fighting in courtrooms across four continents, with Apple accusing Samsung of violating its iPhone copyright.

“Apple doesn’t like to be dependent on Samsung — there’s no question about it,” said Lee Sun Tae, an analyst at NH Investment & Securities Co.

The problem for Apple is that it’s other suppliers can’t help it meet the growing demand for its products, leading it to return to Samsung time and time again.  Currently, Apple gives Samsung nine percent of its total revenue.  At the same time, Samsung supplies 60% of the components that Apple needs for its iPhone.  So, it appears that this battle is going to continue and remain very complex.

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