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Where Will Apple Get Flash Memory Now? 245

Posted by timothy
from the stealing-american-jobs-by-jingo dept.
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."
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Where Will Apple Get Flash Memory Now?

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  • by Anonymous Coward on Thursday April 11, 2013 @10:11AM (#43421997)

    they could probably pay someone to assemble the bits by hand under an electron microscope.

    • 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.

      • Re: (Score:3, Informative)

        by Anonymous Coward

        Unfortunately a fab is not a household appliance that you can have installed by next Tuesday. These things take time to plan and build and need to operate for a while before they crank out working chips. If Apple needs flash memory next year, this year is a little late to start planning.

      • by vux984 (928602)

        oh, and One More Thing... we remember who our friends are, and they get a discount.

        2% discount, provided you buy it on valentines day, and you don't mind that it's already engraved with "Happy Birthday Julilly-Lynn"

  • Non story (Score:2, Insightful)

    by Anonymous Coward

    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.

  • So much FUD (Score:4, Insightful)

    by Anonymous Coward on Thursday April 11, 2013 @10:20AM (#43422081)

    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.

    • Re:So much FUD (Score:4, Interesting)

      by Joce640k (829181) on Thursday April 11, 2013 @10:42AM (#43422251) Homepage

      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.

      But not necessarily at a price that makes people happy.

      • by tlhIngan (30335)

        by Joce640k (829181) Alter Relationship on Thursday April 11, @07:42AM (#43422251) Homepage

        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.

        But not necessarily at a price that makes people happy.

        People would be a lot more unhappy than Apple though. Think of who uses flash memory. And then think of what happens if Apple were to pay a premium to lock in supply.

        Basically if Samsung puts Apple on a

    • by AmiMoJo (196126) *

      Shit NAND flash is a commodity, but when you build high end devices that demand both performance and low power consumption your choices are quite limited.

      It will be interesting to see what Apple do. They usually try to second source everything, but often one of the options seems to suck (LG retina displays, for example).

  • by Maximum Prophet (716608) on Thursday April 11, 2013 @10:22AM (#43422089)
    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.
    • by rvw (755107)

      If Steve Jobs were still alive, he'd just find the next big thing, and stop using NAND flash. Memristors anyone?

      In Soviet Union, comradstors would keep Steve fleshy and alive!

    • by bhagwad (1426855)

      Seriously?...

      The fact that I can't tell if this is sarcasm or not...ouch.

    • Don't think so. NAND is going to prevail longer than that.
  • by alen (225700) on Thursday April 11, 2013 @10:24AM (#43422113)

    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

    • by h4rr4r (612664) on Thursday April 11, 2013 @10:28AM (#43422145)

      This.
      The article is completely crap. Samsung will sell flash to anyone who will buy it, until they are out of capacity. Sure they will likely give better deals, faster delivery, whatever to their own mobile and computer divisions, but they are in the business of selling these chips. They are not out of spite going to ignore a huge customer.

      • by hairyfeet (841228)

        The problem with your theory is this: In 2011 there really wasn't as much stuff using those chips as there are now. In 2011 only the most high end TVs were "smart TVs", now even the low end sets have some smart features which means flash, hell pretty much every thing with a screen now uses flash memory and with so many appliance makers out there if Samsung wants to play hardball I seriously doubt it'll be hard to find takers for those chips.

        But Apple is sitting on such a mound of capital I'm shocked they

        • by h4rr4r (612664)

          Short of buying someone with a fab, Apple cannot just buy a fab. They need the knowhow as much as the physical plant. What will happen is they will buy rights to the output of a fab for X years for Y dollars. They could also buy a small Fab firm, but there are not that many of those left. Who short of Intel and Samsung is down to 22nm? And we both know Apple is not buying Intel or Samsung.

          • by default luser (529332) on Thursday April 11, 2013 @11:28AM (#43422695) Journal

            Short of buying someone with a fab, Apple cannot just buy a fab. They need the knowhow as much as the physical plant. What will happen is they will buy rights to the output of a fab for X years for Y dollars. They could also buy a small Fab firm, but there are not that many of those left. Who short of Intel and Samsung is down to 22nm? And we both know Apple is not buying Intel or Samsung.

            How about Sandisk?

            They're a 6 Billion dollar a year company in terms of revenue (about a quarter of Samsung), and with a market cap of 14 Billion they're quite purchasable.

            The company has a shiny outlook thanks to the increase in flash prices this year [seekingalpha.com], so I would think that a takeover bid would be graciously accepted right now.

            They have their own NAND fabs, have a growing SSD business (vertical integration with desktops?). The only stick point I can see is the Sansa music players, which might get buried during the buyout.

            • by AmiMoJo (196126) * <.ten.3dlrow. .ta. .ojom.> on Thursday April 11, 2013 @01:07PM (#43423983) Homepage

              Sandisk are not really a viable competitor to Samsung for very high end devices though. Samsung have a big advantage in terms of performance and low power consumption, and are very competitive on price. That's why Sandisk flash mostly ends up in SD memory cards, mid-range devices and devices where power consumption isn't an issue.

              Hynix do some okay stuff. Building/buying a fab is an option but I doubt Apple would want to go down that road because the cost of R&D and investment just to keep up with the state of the art is immense, and Apple doesn't do any manufacturing anyway.

          • by tibit (1762298)

            Apple can afford to pay people with the knowhow. If they wanted and needed a fab, they could get one.

          • by DarkOx (621550)

            Apple is not buying Intel

            That is an interesting proposition actually. Apple has a market cap almost four times Intel's, and close to it just in assets. Apple probably could pull off a hostile take over of Intel if they were really determined.

            That would radically alter the market.

            • by h4rr4r (612664)

              I doubt it would be allowed by regulators.
              It would be bad for the entire industry to have the nearly monopoly CPU vendor for the server/desktop space so closely linked with an OS vendor.

            • by Algae_94 (2017070)
              funny thing about a hostile takeover, buying all those shares of Intel would cause the price to rise to the point that the takeover is way too expensive to do, even for Apple. Intel is just not a likely acquisition for Apple.
    • by radio4fan (304271) on Thursday April 11, 2013 @10:42AM (#43422253)

      The summary is way over-dramatic.

      The customer they have lined up to buy the NAND flash is Samsung itself, as they're now making a shit-load of smartphones, tablets, TVs and whatnot. There just may not be enough flash memory to go around.

      The article is also littered with phrases like "what effect, if any..", "one can imagine that...", "there is the possibility that..."

  • So what... (Score:4, Insightful)

    by multimediavt (965608) on Thursday April 11, 2013 @10:28AM (#43422147)
    Pay particular attention to the 'Total cash' line item. [yahoo.com] 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.
    • Re:So what... (Score:5, Insightful)

      by Targon (17348) on Thursday April 11, 2013 @10:41AM (#43422239)

      A fab isn't just some generic piece of equipment, and getting beyond 32nm has proven difficult for most companies. If it were so easy, then AMD would have 22nm processors currently and wouldn't be having nearly as many problems competing in the CPU space. There is also expertise that is required beyond the basic equipment.

      • by Dishevel (1105119)

        Not only the expertise, but also the time required to get up and running, but also the time.
        Once you decide to set up your own chip fabrication plant it will be a few years (maybe a few more) before you start producing the chips.
        By that time the entire market can change. Setting up your own fab is not a solution to a problem you see coming in 2013 or even probably 2015.

    • Yes, they probably can do this. But building a fab for every supply problem isn't practical.
  • by Anonymous Coward

    ...they invent flash and sue everyone who uses their patent.

  • 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.

    • 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.

  • 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.
    • Well, it's more that the executives in publicly traded companies have to report quarterly results. If they aren't good the heat comes.

      Look at Ron Johnson.

      • Before the GD, we allowed executives to own stock. As such, many of our companies were short-sighted and we had crashed every 20 years or so. Since 1933 when the no-executive-own-stock was put in place, the companies switched to long-term focus and we had massive economic expansion. It was after reagan rolled that EO out and allowed executives to own stock that we have seen nothing but short-term focus. It has nothing to do with profits. It all has to do with stock manipulations. Look at GE, IBM, and HP. Th
        • by Patch86 (1465427)

          What is needed is for an EMPLOYEE STOCK. One that is tied to profits, and is not allowed to be sold on the open markets. Yes, basically, an ESOP. However, they need to make it so that NO employee is allowed to own any public stock in the industry.

          What you are describing is a mutual business or workers co-operative; where all employees own a portion of the business, are entitled to vote at AGMs and share in the profit, but the share of ownership is non-transferable- it lasts exactly as long as you are an employee. Additional capital can be raised on the open market as publicly tradeable bonds (such as PIBS), which more or less function as non-voting shares.

          This is a sentiment I whole heartedly agree with. Mutual businesses have shown themselves to be

    • Quite true. Most American companies have to show more revenue and profits than what they got in the previous quarter, else the shareholders will scream bloody murder. However, the Asian companies have got it right: profits don't matter. Marketshare does. Once you have control over the market bordering on the monopolistic, you can charge what you feel like. They also make long term investments (like Samsung in TFA). On the other hand, you have companies like HP whose operations seem to be planned on a day-to
  • by 93 Escort Wagon (326346) on Thursday April 11, 2013 @10:59AM (#43422399)

    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.

  • 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, t

    • by swb (14022) on Thursday April 11, 2013 @12:06PM (#43423261)

      Is less about outsourcing and more about pay rates and employer expectations.

      http://www.startribune.com/business/164935926.html?refer=y [startribune.com]

      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.

  • by Swampash (1131503) on Thursday April 11, 2013 @11:14AM (#43422555)

    Yeah, that'll be a real disaster, what with Apple being so short of cash and all.

    • 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.

  • 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 e

  • What does Apple care? Apple has that much spare change under the couch cushions.

    • 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.

  • by MaWeiTao (908546) on Thursday April 11, 2013 @12:44PM (#43423733)

    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.

  • Because everyone knows Apple isn't sitting on mountains of cash or anything like that.

  • 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

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