Apple Reportedly Reduces Memory Chip Orders from Samsung for the iPhone 5

Reuters reports Apple has reduced its reliance on memory chip orders from Samsung for the upcoming iPhone 5:

Apple has reduced its orders for memory chips for its new iPhone from key supplier and competitor Samsung Electronics Co, a source with direct knowledge of the matter said on Friday.

According to the report, confidential sources say Apple had been reducing its orders from Samsung for memory chips, even though the latter is still on the list of suppliers for the new iPhone. Apple is one of Samsung’s biggest customers, as it relies on the Korean company to produce microprocessors, flat screens and memory such as DRAM and NAND chips for its iOS devices.

Reuters goes on to note the Korea Economic Daily reported Apple had removed Samsung from its list of memory chip suppliers for the upcoming iPhone 5, set to be announced on September 12th. Instead, KED notes Apple has decided to go with Toshiba, Elpida Memory and Korea’s SK Hynix for DRAM and NAND chips over Samsung.

“Samsung is still in the list of initial memory chip suppliers (for new iPhones). But Apple orders have been trending down and Samsung is making up for the reduced order from others, notably Samsung’s handset business,” the Reuters source said.

One may think this decision by Apple is related to the ongoing patent disputes between both companies, but the source notes this isn’t the case. Apple is just looking to diversify its supply chain.

The source denied market speculation that the reduced orders from Apple were mainly due to a souring relationship between the two companies, which are locked in global patent disputes, and said Apple had already been looking to widen its supply chain.

Back in May, Reuters similarly reported Apple had partnered with Elpida, which was noted to supply more than half of its DRAM chip production to Apple. Last July, it was reported Apple had started trial manufacturing with Taiwan’s TSMC to produce A6 processors.

Last September, Digitimes noted Apple had already turned to Toshiba and Elpida for NAND flash memory and mobile RAM production, which is similar to what we’re hearing with this story; just ast week, Bloomberg noted TSMC had turned down Apple’s ambitious plans to secure exclusive access to chip production.

Even though the source claims Apple is not parting ways with Samsung because of their souring relationship, I find that hard to believe. You shouldn’t bite the hand that feeds you, and in this case Samsung’s copying ways has not made Apple very happy.