Where Will Apple Get Flash Memory Now? 245
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."
Non story (Score:2, Insightful)
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)
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.
so who is samsung going to sell to? (Score:5, Insightful)
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
Re:Yes please (Score:2, Insightful)
Nothing like the nerdrage geeks seem to have against companies they have nothing do with. Grind your teeth!
Disclaimer: I hate the fact that people get so riled up over cell phones
So what... (Score:4, Insightful)
Re:apple are retards (Score:2, Insightful)
Re: Non story (Score:5, Insightful)
Well the story assumes that Apple hasn't already secured their supply. This story from 2005 [macworld.com] reports how Apple made 5-year deals with 5 different manufacturers to secure their supply. The deals have since run out but it doesn't take a grand strategist to guess that Apple may have negotiated new deals. Remember Apple is very secretive so that may not announced to the world all their plans. Also, Apple has been known to front money to their suppliers in exchange for guaranteed supplies. Today they are sitting on billions in cash.
I doubt such a deal could remain secret due to SEC filings from Apple. Not to mention the fact that the suppliers will want to say "Look at us! We just got a billion dollars!" so that they may boost their stock prices. If we haven't heard about Apple making such a deal, then it probably hasn't happened. And it may not happen easily. Everyone is using flash storage now, and there is likely to be a lot of concern over supply. The big players may not want to make a deal with Apple to guarantee a supply so that they do not artificially limit the supply for their own products. Of course with a few extra billion, you could possibly increase your production significantly.
Re:So what... (Score:5, Insightful)
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.
Re:so who is samsung going to sell to? (Score:4, Insightful)
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..."
Re:Stupid Move (Score:5, Insightful)
6 years ago Samsung was barely a competitor in the non-smartphone market, now Samsung is outselling Apple in smartphones.
Samsung is probably their own biggest customers for their NAND flash. Companies often "buy" within their own divisions, so Samsung's phone division is Samsung's component division's best customer.
Now also consider that Samsung has become the largest manufacture for smart TV's and AV components, all requiring NAND flash, even some of their refrigerators have web services built into them. Samsung is creating an empire significantly larger than Apple.
ANY Samsung shareholder should be thrilled with the direction Samsung has taken and turning it into a household name that exceeds Apple's mindshare around the world.
You could be a stupid investor and dump Samsung shares because you don't like how they are treating Apple, but realize Apple is becoming a small drop in Samsung's profits and business strategy. Considering how vocal Apple has been about moving away from Samsung, Samsung is taking the right steps to sever ties and move towards more lucrative and profitable industries, namely, themselves.
Samsung makes phones, tablets, computers, the parts that goes into those devices AND TV's, appliances, and so much more. Samsung is so friggen diversified that Apple probably NEVER made a significant impact on their profits, so if I ran Samsung, I would say good riddance and cripple one of their pissy competitors in only one of their many many divisions.
Wow... Talk about pulling a story out of thin air (Score:5, Insightful)
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.
Re:so who is samsung going to sell to? (Score:4, Insightful)
This other confidence inspiring gem FTA stuck out:
"There are few reliable sources for this, a comment in the Korea Times here, an unnamed supply chain sources there, but the general opinion is that..."
Re:they bought Anobit but.... (Score:3, Insightful)
Apple could probably put a small percentage of their capital into TSMC and double or triple their capacity.
Re:Yes please (Score:2, Insightful)
Yes, would've been much better to still be in these mythical days when everything about smartphones was cheap, open, easy to use, and not at all locked down and preconfigured with abortionware by the cell carriers.
You lot amuse me - the iPhone is orders of magnitude more "open" and functional than anything that existed in anything remotely resembling a "mainstream" smartphone market prior to the iPhone's debut. But because it's not completely open in every way you can imagine, you clickety-clack away on Slashdot, burning all that nerdrage - and probably some lean tissue - talking about how Apple's entrance into the smart phone market plunged us into some sort of Smartphone Dark Ages.
The good old days you all seem to remember aren't anywhere near as good as you'd like to believe they were. And the best thing is, we have legitimate competition in the smartphone market between Android & Apple - which means that we, as consumers, will continue to benefit as they duke it out.
Quit yer bitchin - these are great days we're living, bros.
(Incidentally - since Apple's 30% cut is so unreasonable and extortionary, where are the multitude of viable competitors charging something significantly less than that? Maybe that 30% really is a lot closer to 'break-even' or 'modestly profitable' than you'd like to admit, given that they're handling hosting, sales, distribution, and payment processing?)
Re: Non story (Score:5, Insightful)
The reason Apple's iPhone/iPad sales were up last quarter but their profit remained flat is because they were losing more money on the supply chain.
So I wouldn't assume it wont hurt them, it already did on other components (screens), it likely will on flash too. It may well mean that not only will profits be flat again with an increase in sales, but might actually decline despite shifting more units.
Effectively much of Apple's profits have been gained because they had great deals on components, they don't have those deals any more, and their suppliers like Samsung are sick of their lawsuit antics and in close competition now so are unlikely to sign such sweet deals again either. You're right that they could raise prices but that will have an impact on sales - maybe not to fans, but certainly to the average Joe who also buys the iPhone normally.
Effectively they're in a quandary, because costs of production has gone up as fast as rate of sales causing flat profits, if they raise prices then they'll lose even the continued increase in rate of sales, if they don't, then profit might actually go down. The only way they can deal with it is to make more profit elsewhere (i.e. a new product line), or somehow more drastically increase rate of iThing sales to outpace the growth in component cost.
In reality they'll probably attempt both, the success of which will no doubt play out in front of our eyes in the next year dependent on whether the iWatch and iTV turn up, or the iPhone 6 and iPad 5 can steal a serious share of the market back off of Android. They certainly can't rely on cheap component deals though - I suspect even Foxconn will be reaching a point where it realises it's got Apple by the balls in terms of manufacture given that perhaps no one else can churn out the levels Apple needs to meet demand and may start upping it's prices somewhat too.
The "skilled labor" problem (Score:4, Insightful)
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.
Funniest post ever! (Score:5, Insightful)
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.
Re:so who is samsung going to sell to? (Score:4, Insightful)
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.
Re:the old AMD plants are closed or underutilized (Score:5, Insightful)
It took SAMSUNG 2 years to build a fab in China recently. That was considered neck-breaking speed to have one built. China is the easiest place to build b/c of poor labor and environmental laws, but you can't simply clear land, pour concrete, complete a building, and get the equipment online much faster. Even if you purchased an old fab, it would take at least a year or two b/c the old equipment wouldn't be of the quality necessary -- nor would the air filtration, etc. It'd take you almost as long to re-furb an old fab as it would to build a new one to get it to where you'd want it to be.
All companies that build fabs have the kind of money to make these things happen. Pouring more into it won't make it happen any faster as speed is always a priority in the industry. You build a fab, expect to get so many years out of it of high profit, then switch gears to low profit as you build another fab for the higher profit things... and then re-tool the old fab or sell it when the cycle starts over.
Gah, Slashdot needs a better way to log in so I don't have to post as AC w/ out wiping what I just wrote and finding the post to reply to... oh well.
Re:they bought Anobit but.... (Score:3, Insightful)
They would have decided two years ago.
Maybe there's a reason Apple's capital spending has increased dramatically in the last 2-3 years.
http://www.asymco.com/2012/12/11/the-new-age-of-capital-intensity/ [asymco.com]