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Samsung Electronics To Supply Main Chip For Apple Inc. (NASDAQ:AAPL)’s Next iPhone

Samsung Electronics and Apple Inc. (NASDAQ:AAPL) have decided to put an end to the rivalry, which was created by Steve Jobs.

The two onetime comrades are joining hands again with Tim Cook, Chief Executive Officer of Apple, deciding to withdraw lawsuits filed against Samsung.

Samsung will invest $14 billion in establishing new plants for the supply of a main chip for Apple’s next iPhone. With sales from the mobile phone business is sluggish, the new orders from Apple will give a boost to its chip making group.

The soothing relations will help Apple to reap once again huge profits with access to sophisticated chips of the Samsung. Samsung has reported impressive growth in components business in 1Q2015.

According to an analyst, Betsy Van Heese at Wedbush Securities, Samsung has returned to the chip business with a vengeance.

It is the bad time for the SanDisk Corporation (NASDAQ:SNDK) and other Taiwanese chipmakers. Taiwan Semiconductor Mfg. Co. Ltd. (ADR) (NYSE:TSM) that was supplying components for earlier versions of the iPhone has decided to cut spending.

SanDisk, which has been supplying memory chips for the Mac, iPad and iPhone, has reported earnings for 1Q2015. It fell short of the market expectations on account of lost customers like Apple, product delays and reduced component prices.

Apple, which has been buying the flash drives for the latest Mac models, is now turned its focus on Samsung. Competing with business conglomerate Samsung is not that easy for SanDisk.

According to Bloomberg, SanDisk has been generating business worth 19% from Apple. The same fate has been in the store for other Apple suppliers like TSMC, AU Optronics Corp (ADR) (NYSE:AUO), SK Hynix, and Micron Technology, Inc. (NASDAQ:MU).

Apart from its renewed ties with Apple, Samsung is continuing to launch its smartphones like the Galaxy S6 Edge and Galaxy S6 that are getting favorable reviews from customers.

Published by Pamela Garcia

Pamela Garcia is a keen follower of U.S. stock market

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