Apple cuts memory chip order to Samsung for new iPhone: source
(Reuters) - Apple Inc 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.
Context & Ripple Effects
Samsung has been inside Apple's iPhone memory supply since at least 2007, when DigiTimes reported Hynix and Samsung were prioritizing NAND flash output for Apple, and an analyst flagged another Apple chip order for 32GB iPhones in 2009. A Reuters source now says Apple has trimmed its memory orders to Samsung for the new iPhone — a single-source claim, but one picked up same-day by Bloomberg, the Wall Street Journal, CNET, ZDNet and four other outlets.
Timing matters: the report lands two days after Apple sent confirmed invites to its September 12 event at Yerba Buena Center, so it reads as pre-launch supply-chain positioning rather than a routine quarterly adjustment. It also lands with Apple and Samsung fighting on multiple fronts — Samsung is simultaneously a key component supplier and Apple's chief smartphone competitor.
First-order effects
- Samsung loses memory-chip volume on its highest-profile device just as the new iPhone ramps, while Apple gains negotiating leverage by showing it will shift allocations away from a rival.
- Alternative NAND suppliers — Hynix among them, per the 2007 sourcing split — stand to absorb the reallocated orders if the reported cut holds.
Second-order effects
- Reallocating Apple's memory demand tightens competition among remaining NAND vendors for the freed-up share, pressuring Samsung on price and allocation terms rather than letting incumbency carry the account.
- Samsung faces an awkward calculus of subsidizing a competitor's flagship product through component sales, sharpening internal pressure to prioritize its own Galaxy line for capacity.
Third-order effects
- If Apple keeps trimming single-supplier exposure to Samsung, the structural direction is a deliberately diversified component base where no rival-cum-vendor is indispensable — dual-sourcing as standard practice for Apple's silicon and memory.
- For the memory industry, anchor-customer orders becoming contestable makes NAND capacity planning more cyclical, since the largest buyer can swing allocations between vendors launch by launch.
The trend: Apple is methodically reducing its dependence on Samsung as a component supplier even while Samsung remains embedded in its supply chain, turning every iPhone launch into a renegotiation of that fraught relationship.