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Apple to become Samsung's biggest customer

Kelly Hodgkins, @kellyhodgkins
February 14, 2011
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A report from the Wall Street Journal suggests Apple is about to become Samsung's biggest customer in a deal estimated to be worth US$7.8 billion. As part of its purchase, Apple will be securing LCD displays, NAND flash memory and mobile chipsets from the Korean manufacturer. Each of these components will be used to build Apple's popular iPad and iPhone.

Samsung is not the only parts supplier to receive a big check from Apple. An earlier rumor from iSuppli suggests Apple has invested $3.9 billion in pre-payments to LG display, Sharp and Toshiba Mobile display for LCD technology related to its iOS devices. Instead of direct unit supplies, some of this latter investment may be used to help build out factories and increase production of LCDs for upcoming products.

In the past, securing an ample supply of NAND Flash memory was a problem for Apple and the industry at large. During the early boom of the iPhone, NAND flash memory supply was seriously constrained due to the demand of the iPhone. Both Samsung and Hynix, the #1 and #3 memory manufacturers in 2009, struggled to meet Apple's growing orders. At one point, Samsung was thought to have set aside its entire supply of NAND chips for the Cupertino company.





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