Samsung and Apple’s Love-Hate Relationship

With the introduction of the Galaxy S4 and stirring rumors about the next iPhone release, it may seem as if the two companies are nothing but rivals, but their history goes deeper than just competition.

Following the trend of the current battle, Apple recently reached an agreement last month to shift more of its chip production away from Samsung in favor of TSMC, or Taiwan Semiconductor Manufacturing Company. The deal was described as one “whereby TSMC replaces or supplements Samsung, the incumbent supplier of Apple processors.” In recent, years, Apple has also been buying display screens and flash memory from other manufacturers.

However, Samsung will remain Apple’s primary chip supplier through next year, according to a TSMC executive. Why?

Samsung is still the world’s largest provider of the processors, memory chips, and screens that Apple needs for its devices. The two also have a history together in which Samsung has been creating custom chips for the iPhone maker, the Journal noted. That working relationship is difficult to establish elsewhere from scratch.

On its end, Samsung depends on Apple for a hefty chunk of business. Apple is one of Samsung’s largest component customers, and cutting off that supply would dig into Samsung’s earnings.

“If Samsung loses Apple as a client, it will have an impact because Apple represents a large portion of Samsung’s sales of non-memory chips”, Mark Newman, an analyst at Sanford Bernstein in Hong Kong, said.

At the same time, the relationship between the two has grown dicier. Samsung’s rise in the mobile market has challenged Apple’s once-dominant position. And the two companies have kept the legal system busy by flinging countless lawsuits at each other.

Apple is clearly striving to untether itself more and more from Samsung. But the two seem destined to remain joined at the hip for the foreseeable future.

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