Apple Cuts Reliance on Samsung Components

Apple has begun phasing out Samsung components on is newest iPhone in a bid to dampen the Korean rival’s surge to a dominant position in the global smartphone market, according to industry insiders cited by Chosun Ilbo.

In 2011 Apple had spent about $8.8 billion on components from Samsung Electronics, mostly on processors, memory chips and LCD screens. However, for the new iPhone set to be unveiled Wednesday, Apple had begun turning to other suppliers in Japan, Taiwan, China and Korea for memory chips and LCD screens.

For its first shipments of new iPhones Apple ordered DRAM chips from Korea’s SK Hynix and Japan’s Elpida and NAND flash memory from SK Hynix and Toshiba but ordered none of those components from Samsung, according to news reports. For prior iPhone releases Samsung had been supplying about 30% of Apple’s NAND flash and mobile DRAM chips for iPhones.

Apple had already phased out Samsung LCDs since rolling out the iPhone 4 in 2010. However, for the brain of its smartphones, Apple will continue to use Samsung application processors.

As of late August Samsung held about a 33% share of the global smartphone market while Apple’s share had been reduced to about 17%. The two companies have been engaged in a patent dispute in the courts of nine nations. Apple recently won a $1.05 billion jury verdict against Samsung in its US case. The judge in that case is set to decide on September 20 whether to grant Apple’s request for an injunction banning US sales of infringing Samsung products.