Posted in: iOS, Mobile hardware

Samsung reportedly hikes manufacturing costs by 20% for Apple’s processors

According to reports coming out of Korea, Samsung has apparently increased the manufacturing cost of processors that it supplies to Apple by 20%.

As you may know, Apple custom designs its own chipsets for use in iOS devices but these chips are then manufactured by Samsung to Apple’s specifications. Samsung has now increased the prices of these chips by 20% and Apple, faced with the lack of immediate alternatives, has agreed.

While it is easy to go knee-jerk on the whole situation and just assume this is Samsung’s way of getting back at Apple for the current legal issues between the two companies, one must first understand that the Samsung that competes with Apple in court and Samsung that manufactures chips for Apple are not exactly the same but rather different corporations operating under the same conglomerate brand.

Also, the chip division at Samsung would be naive to mess around with Apple because what happens with the other divisions because Apple is their biggest customer, a customer that has also been looking to move their business elsewhere for some time now. Increasing their prices would only make Apple move away faster unless there is a logical reason for the hike.

A more reasonable explanation could be increase in the prices of parts which may have compelled Samsung to increase the prices of the chips. Or, as The Verge mentions, due to the significant investments that Samsung recently made in their Austin, Texas plant to cope with Apple’s greater demands.

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