Comment by jcampbell1
13 years ago
While you are right, if a supplier is actively working against a customer, it is going to create problems. There are always a million things outside of the contract that matter. If the customer exceeds capacity planning volume, that gets resolved outside of the contract. Most suppliers will bend over backwards to help the customer. Will Samsung? Maybe.
If I were Apple, I'd prefer a supplier that has a natural incentive to be a great supplier rather than one that only has a contractual obligation. In the long term, contracts are as hollow as wedding vows. The relationship between a customer and supplier must be mutually beneficial with aligned interests.
> _if a supplier is actively working against a customer_
Samsung was in the mobile phone business long before Apple. It shipped its first phones in 1998 and was the second-largest manufacturer by 2007.
So Apple already knew it was going to a phone manufacturer, and that it would be competing with one of its suppliers.
I'm sure they'd be exploring alternatives ... But it's just the scale at which Samsung supplies them the chips that it's not seemingly possible for many other suppliers in the world ...
TSMC ships huge volumes, and that is indeed where apples manufacturing is rumored to be going. IIRC they recently signed a huge deal with them too. In this business though a mature process like samsungs 28nm High-K metal gate is quite valuable over a newer one like TSMC's 22nm.