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Where Will Apple Get Flash Memory Now?
An anonymous reader writes "EE Times examines whether Samsung could be about to control the equipment output of Apple by putting the Cupertino company on a rationed supply of NAND flash as the non-volatile memory goes into short supply in 2013. The analysis argues that Apple may need to put down billions of dollars of cash to fund a guaranteed NAND flash supply plan, something that Samsung did in the middle of the last decade."
they could probably pay someone to assemble the bits by hand under an electron microscope.
Didn't Apple buy Anobit? So why would they buy NAND from Samsung?
Apple may need to put down billions of dollars of cash to fund a guaranteed NAND flash supply plan
..which wouldn't be a problem for them.. and given the way they've worked with processors and displays, is to be expected.
Anobit has no fab plant, so it doesn't solve the problem of not being able to get the actual components.
Donte Alistair Anderson Roberts - hi son!
Karma: Chameleon
apple are such retards..... why didn't they make the iphone with limited internal storage, just enough for apps and some media, and let the user put the rest of their stuff on a microsd card???? that means there could have been so much less usage of flash memory supplies in the long run.... stupid companies who just use resources without any thought to long-term sustainability
Make them squirm. DISCLAIMER: i hate apple.
Every time a company is not 100% vertically integrated you get these kind of fearmongering articles. NAND flash is a commodity, they can find it somewhere else.
If Steve Jobs were still alive, he'd just find the next big thing, and stop using NAND flash. Memristors anyone?
Of course, if anyone else tried this, the new tech would be non-viable, but Steve would use his force of will to make the new tech work at the price he wanted to pay.
All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
Samsung has a monopoly on NAND flash chips?
This whole none-story is based on a ludicrous premise.
EETimes is putting out click bait now? WTF?
this is not a school yard
samsung borrowed lots of money to build high tech flash memory factories. they can play hardball with apple, but they need to have a customer lined up to buy up whatever apple doesn't. unused capacity means lost revenue while salaries and interest on the debt still has to be paid
Pay particular attention to the 'Total cash' line item. Apple could build their own fab anywhere they wanted with the amount of cash they have. Why is this an issue? Oh yeah, it's not. More FUD on a slow news day.
...they invent flash and sue everyone who uses their patent.
If I were a Samsung shareholder and if Samsung did something like this (which I doubt they would do - I imagine the article is just a click bait article about two companies that get people all in a tizzy), which amounts to throwing away an incredibly lucrative contract out of spite - I'd be more than a little pissed. Apple represents a not-insignificant portion of Samsung's income and throwing away* those billions of dollars isn't good business by any sane metric.** If I saw Samsung management making stupid decisions like that, I'd be voting for new management who made sound business decisions rather than emotional ones.
* Yes, I realize that the patent troubles between the two companies is resulting in Apple pulling away from Samsung but speeding up that breakup, rather than taking steps to halt it, is still bad business.
** While I know that emotions on Slashdot run furiously hot (either for or against Apple and/or Samsung), in the real world of big business, emotions are bad business. Sound business decisions are what you base your decisions on, not emotions. It ain't high school kids.
Apple is the king of supply chain.
The real secret to their products is their ability to secure huge quantities of the parts they need, when the need them. This takes planning up to years in advance.
They were probably securing contracts and buying fab capacity to make iphone 5 parts before the iphone4 launched.
This way they have plenty of devices to share when the hype curve is at it's peak, and don't need to spend a premium to buy last minute parts/capacity to fill a spike in demand.
Apple has been in the process of divorcing Samsung for many years now. Apple undoubtedly already has contracts with other manufactures, and has for years now. Really, how can a company turn down offers like "We want to purchase your entire 2012-2015 flash fab output in advance. Here's money up front to expand your capacity, and more money to help develop the next gen products you're going to make for us" - This is literally the sort of deals apple makes with their suppliers.
We are all frustrated by Apple at one time or another, but that don't justify spreading ridiculous FUD.
Apple has more cash then ANYONE IN HISTORY; security their supply lines is hardly going to be difficult.
FUD was really for describing large corporations' tactics of spreading disinformation against competitors products or services.
The most famous and probably the start of the term "FUD - Fear, Uncertainty and Doubt" was Microsoft's comparisons of their OS with Linux - especially for server and other back end applications.
In this case, it is inappropriate.
Remember the tsunamis and other natural disasters in SE Asia that cased supply chain nightmares for months afterwards in the computer industry? Apple was affected too.
But I mean, let's say this is true. I, as a consumer, don't give a shit. If I were a stockholder of Apple, then I may be concerned about a couple of quarters at best.
But as of now, Apple has bigger issues than Samsung as a supplier
tl;dr; "FUD" is an over used expression and is being used as a lazy means of disputing arguments one may disagree with.
But other than that, the parent is correct in that this is a non-issue for everyone but the purchasing dept at Apple.
So many of american companies scream free enterprise, but rarely take notice of the fact that other companies are nationalistic or simply in control of their future. For american executives, it is all about short-term profits since they own stock.
I prefer the "u" in honour as it seems to be missing these days.
The article starts by saying there's little to no reliable evidence for this... but Apple MAY be planning to jump ship on Samsung with regards to manufacturing of its A7 processor. Then, from there it goes on to "if this happens, how will it affect Samsung's willingness to sell memory to Apple", and speculates (with zero support, not even rumors) that maybe Samsung MIGHT need to keep more of its own memory for its own products, in which case it MIGHT have to allocate how much memory Apple can buy (again, this is not even supported by some whisper the author heard in a bar - he's flying solo).
That's bad rumor-mongering even by analyst standards.
#DeleteChrome
...all in the midst of a glut in capacity in the semiconductor industry.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
This is the thing I hate -- and it's not just Apple. These US companies offshored Allllll their manufacturing and processes to take full advantage of cheap labor, third-world economies and loose environmental restrictions. People at home get laid off[0] jobs dried up, manufacturers closed their doors, and a good portion of blue collar labor went on unemployment. Now, these same assholes complain their is no "skilled labor" to fill their job openings, so they need to import H1B workers[1]. What's more, then become worried that they can't find a source for components for their gizmos that USED TO BE PRODUCED IN THEIR OWN BACKYARD? The irony is mind-numbing.
[0] - TI lays off 1700
[1] - H1B Visa lottery
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Yeah, that'll be a real disaster, what with Apple being so short of cash and all.
Time for an iFab. Apple can easily foot the bill for a new fab anywhere they want. Hopefully in the USA.
go something like this:
Samsung:we're instituting a policy to limit the amount of flash you can purchase from our company.
Apple: and now that we own Samsung, we're rescinding the
policy, firing the management that instituted it, buying their homeowners association,
and forcing them to live out the rest of their days in an underpass near the airport.
Samsung: we dont think thats a very good idea
Apple:: then think different while you're fighting for that big piece of cardboard tonight.
Good people go to bed earlier.
That seems to be their strategy to stay on top lately.
Apple much to its disgrace has large amounts of unused cash around, that perhaps it should have invested earlier, but buying out Samsung is simply not even close to being a reality, Samsungs market cap sits at $200Billion admittedly half that of Apples Plummeting Market cap of $400Billion, but it is far too large for Apple to buy.
Time for an iFab. Apple can easily foot the bill for a new fab anywhere they want. Hopefully in the USA.
The fact its an entirely different business from manufacturing they rebadging foxconn phones, its what up until recently so profitable [not so much anymore...ask foxconn] where Apple make 40% and Faoxconn make about 3%, setting up facilities even if they manage to move that much money around, takes time and planning, and whatever they so they will shit on the USA.
I honestly think that Apple and Microsoft are now having a stupid-off. They're seeing which foot-shooting, disasterous decisions each can make to see who can bankrupt the company first. everyone weigh in on who you think is winning. Is suing the people who make your screens, lease you patents, and sell you flash memory the stupidest or is an OS with a UI from hell that everyone hates followed by double downing by blaming your vendors then undercutting them and making your own devices stupider?
Yeah, that'll be a real disaster, what with Apple being so short of cash and all.
Except right now 35% of Apples value got chopped of Apples Value due to slightly less than expected sales and shrinking margins, Judging by Foxconn cutting iProduct manufacture, and this news I guess we get to see a repeat of Apples share drop...and with it an awful lot of brand support.
Considering that the most valuable company has a way of getting what they want, and literally millions of rabid customers willing to suck up everything they produce.
Somehow I feel confident that Apple will come out on top.
I don't understand why Apple doesn't just spend all their $billions locked up overseas to build an overseas manufacturing facility. They have plenty. Probably plenty to do it multiple times. Then, they get the best of multiple worlds: 1) they are not as reliant on Samsung, 2) they get to use that money tax-free, 3) they can have some meaningful diversification
And if the thing goes belly-up? Then they "buy" the whole thing from their foreign subsidiary with US cash and get a tax rebate on the business expense in addition to never having paid taxes on it in the first place.
need a fab? buy a fab. update it. make a screaming pile of flash memory. undercut the market price while supplying all their own.
oh, and One More Thing... we remember who our friends are, and they get a discount.
if this is supposed to be a new economy, how come they still want my old fashioned money?
Apple has more cash...
Let me stop you there. Having lots of cash on hand is a poor sign for a company. The fact that this article is about shrinking margins...on the heals of Apples shrinking sales, and Apple are looking little prepared for it. Technology companies burn through money on the way down. They could still invest the money...but that takes time to realise.
Is less about outsourcing and more about pay rates and employer expectations.
http://www.startribune.com/business/164935926.html?refer=y
There was another story in this paper as well about this I couldn't find the link to -- a survey found that the "problem" wasn't a lack of workers, it was the low wages and working conditions that kept employers from recruiting workers.
Training is an issue as well -- employers have a desire to hire "ready for work" employers, even though the employees they often want need to have extensive education and experience with complex, high tech manufacturing systems that are difficult to get experience with...without working on one.
It's a self-perpetuating problem for employers. As long as they refuse to invest in training and paying salaries, they will have a shortage of workers.
I also think they have another problem -- the culture of manufacturing and blue collar employment generally. Manufacturing jobs have historically been "dumb" jobs -- the kind of work some high school dropout or grad got working on an assembly line turning a bolt, adding a part or whatever. Little to no skill, no education. Treat them awful and throw them away, we can always plug another body into this. It's why much of this COULD be outsourced -- there's little difference between an ex-jock who barely got a high school diploma and some third world country mouse who moved to the city.
Unions boosted the wages of these jobs until the early 70s, but there was always this cultural gulf between "labor" and "management"" and usually open hostility, as management sought to screw labor any way they could, and labor sought to take management for maximum compensation and minimum work. Labor were people to be piss-tested, searched and yelled at, and sic your security goons on if they step out of line.
Now we're at this point where the people manufacturers need aren't the dumb HS grads or third world peons, they are educated people with extensive skills, but business keep perpetuating this fucked up class warfare kind of culture, with the working conditions and pay to go with it. No wonder they can't find people -- anyone self-aware enough and smart enough to do this kind of work wants nothing to do with being treated as little more than a slave.
If we would have a manufacturing environment that treated the skilled workers more like white collar office workers and paid them that way, I can only imagine the talent pool would grow a lot deeper and the productivity would skyrocket.
Why? It's not the cotton or the land itself that is bad, it's the filthy, unevolved, USian crackers that inhabit it that need to die.
The way you say it, it's like those inbreds MADE the fucking cotton and stuck it into the ground, which is just stupid. You're not one of them worthless USian crackers too, are you?
iPhone is orders of magnitude more "open"
No, no its not. Its proprietary hardware; proprietary software; locked down; it even uses it own cables. In every way it breaks standards. It wasn't even a bad thing for its customers...until recently.
Seriously?
The market will get Apple resp. Foxconn what they need.
What does Apple care? Apple has that much spare change under the couch cushions.
Taiwan? Germany? Or, godforbid, the United States?
The added bonus is that they wont copy your designs while they're making this stuff for you.
Apple pre-paid which means they would have to account for it to their stockholders and the SEC. If they made an agreement on price and supply amount without negotiating upfront money, I don't think that they have to report it.
If they have a contractual obligation that would have to appear in the financial statements whether or not there is money exchanged up front. It is a liability of the company and they would be obligated to report it. It's kind of an irrelevant point however since no supplier is going to accept orders that size without a lot of upfront money. To produce the quantity of product Apple would buy requires major capital investment (equipment, facilities, etc) and no one is going to invest that sort of coin trusting to Apple's (or anyone else's) good faith. Basically an order that size requires a big upfront payment.
That may be one of the funniest things I've read in a while.
Next time I need a baby in two weeks, I'm going to get together a team of 18 women and have them knock it out. I can pay extra, so it shouldn't be problem to get them focused and working together.
Is it just my observation, or are there way too many stupid people in the world?
Apple has repeatedly spent millions of dollars in cash upfront to secure flash chip supplies since they started their switch to flash storage years ago so where is this anal-yst pulling their information from?
Jesus was a compassionate social conservative who called individuals to sin no more.
and with enough crackling, fresh, green US of America freakin' M.O.N.E.Y, obstacles melt quickly.
if this is supposed to be a new economy, how come they still want my old fashioned money?
it's not how many resources you can put into a task, it's getting the RIGHT resources...
if this is supposed to be a new economy, how come they still want my old fashioned money?
fucking power connectors and power specs for the phones weren't standard.
I'm sorry Apples power connectors aren't standard, USB FYI is. perhaps if Apple had followed the industry standard rather than implementing its own incompatible to itself...and requiring a an ARM processor inside to fix its lack of forward thinking cables. Your off-topic the reality is Apple is a closed cancer ward does not allow third party stores; Development on platforms other than its own; First party Applications that conflict with its own; It again has proprietary connectors; Cables; API's; proprietary programs; Poor computer interaction; follows no industry standards...and does so only for the sake of locking -in its dwindling market-share of customers, who have been overpaying for their cheap Chinese electronics for years....in context of this article, those Chinese electronics suddenly got much more expensive :)...in context of your comment its a closed prison cell...with a man named Bob suddenly finding you more attractive than he should...and you have forgotten your shank.
Because everyone knows Apple isn't sitting on mountains of cash or anything like that.
What does Apple care? Apple has that much spare change under the couch cushions.
...because if this article is right the company Apple has lawsuits with in >50 countries worldwide, in an attempt to get them banned, suddenly finds itself dependant on a critical component. Paying more cash is only part of the problem, but your right in the fact that is the least of its worries, not being able to fulfil demand is a greater problem.
This is silly. Intel's entire sales: CPUs, motherboards, memory... were $53b last year. Apple has $140b sitting in the bank. They could buy 100% of Intel's capacity with cash on hand for almost 3 years. Apple's problems with Samsung I'm sure are an annoyance, they aren't a critical threat to the company.
And before someone mentions some sort of secret Intel conspiracy they could buy all of Intel for less than their cash on hand
Only if money/supply is guaranteed.
That's what a contractual obligation is - a guarantee. I didn't use those words carelessly. There would be little point to a supply agreement without any actual obligation to buy.
If I have an agreement that I may buy up to X amount for Y price, it isn't an obligation.
Correct though depending on the nature of the agreement it might be considered an asset. What your are describing is an option (properly speaking a real option) and depending on the particular way it is done the company may or may not have to report it. Typically not on the balance sheet but somewhere in the filings could be required.
Many are saying that the memory suppliers got burned by Apple time so they wouldn't enter into any fixed agreements would they?
If they got burned then they only have themselves to blame. If Apple wants to pay my company to tool up to do a big order I'm going to make sure the agreement cover most/all of my capital costs and probably the relevant fixed costs as well. Perhaps these companies took a gamble for competitive reasons but if they took that risk knowingly the first time and got burned then I don't have a lot of sympathy.
Not all the NAND flash in the world is made by Samsung. Sandisk, for instance, gets (or at least got) the bulk of their NAND from Toshiba. Hynix is also a major player, as is Micron (which acquired Intel/ST's flash company Numonyx). There are quite a few suppliers.
Not to mention, Apple could easily buy a fab in either the US or elsewhere to just make NAND. And DRAM (since memory fabs to tend to be somewhat different from fabs that manufacture CPUs and controllers)
Can Samsung afford to offer sweetheart deals to internal customers who have even lower profit margins than Apple, and no app store to supplement the income?
Its kind of off-topic, although I do find it hilarious that the pro-Apple arguments have moved from "Race to the Bottom" to "We can survive better at the bottom". The major problem with Apple surviving on a diet of store only money...and Google bunging them a few dollars is that Apples has thrown away all their market share chasing those early profits, so I hope its not going to have to rely on that money. Android already had whole countries producing Android applications exclusively...and least they will have America, at least in the short term...till the carriers turn on them.
Samsung has 36% marketshare, roughly the same as Toshiba. They're not the only fish in the pond, and with Apple sitting on something like $140 billion to throw around, they're not going to be hurting for NAND.
Toshiba, with more than a third of the global NAND market, has a market cap of $23 billion... Apple's cash hoard is six or seven times that size...
way before there was any sort of industry standard for anything.
USB has been about since 1996, USB mass storage device class has been in Windows ME/2000, and yes many phones could manage this before the iphone release, like everything else with the iPhone...Apple is Number 2.
Apple should have a trade in program. People hand in their iPhone 5, an Apple Store genius scratches an S after the 5 on the back of the case and then hands it back, but with a $800 service charge for the upgrade.
I mean come on, it's pretty much what Apple iPhone users do anyways; stand in line to rebuy last years product with an S lasered after the name. At least Apple doesn't have to go through the pretense of buying NAND chips to pretend to make a new product.
I haven't thought of anything clever to put here, but then again most of you haven't either.
That is a non-argument, just an assertion that Apple "should have" gone for market share.
No, it's neither, it's a business strategy. Apple chose to make money by *maximising profits on hardware* which has left it with a tiny market share [in some markets none existent], Which makes for a weak app-store content and less customers buying you content...which sadly leads to a shrinking market share [hell even Microsoft is bragging larger market share]. They could have taken an Amazon approach [sell content, make no money on hardware], Google approach give away OS [for Advertising] or License it like Microsoft [If their product is really worth it!?], but they didn't...am I asserting it was a massive failure by Apple *absolutely*, but I argued that a maximising *market share* strategy [any of them] was the strategy they should have taken a *long* time ago if they planned to live off their store content, and unfortunately *market-share* is the only answer to that one, but then they have $140Billion in cash...they could like swim in it like Scrooge McDuck
I get it, did you notice the Mac on Kin Jung Un's desk? Maybe his rhetoric is an Apple plot. He is an Apple agent, by putting the hurt on Samsung he could change the supply problem in an, er... flash!