Samsung Counting on ‘Strict Internal Firewall’ to Retain Apple Parts Deals

Samsung Counting on ‘Strict Internal Firewall’ to Retain Apple Parts Deals

In a perfect example of “strange bedfellows”, while Samsung and Apple battle tooth and nail on the legal front, Samsung is also Apple’s largest component and parts supplier for its popular devices.


Samsung remains a major component supplier to Apple, and the South Korean company hopes to retain that business relationship through a “strict internal firewall” dividing its handset business and components operations.

After Samsung’s defeat in court at the hands of Apple, the company held an emergency meeting on Sunday led by vice chairman Coi Gee-sung and head of Samsung’s mobile business JK Shin. Noticeably absent from the meeting was Samsung Chief Executive Kwon Oh-hyun, who mostly watches over the company’s components business.

Even though he is the CEO of Samsung, Kwon was not present because the company tries to keep a “strict internal firewall” between its component supply business and handset operations.

Samsung considers its supply contract with Apple a separate entity from any litigation with Apple. The divisions in the company were created to avoid any potential conflicts of interest with major customers such as Apple.

Even as Samsung and Apple battle it out inĀ  both court and the electronics marketplace, Samsung is also Apple’s largest supplier of parts and components for its industry leading devices. Samsung builds the custom processors found in all of Apple’s iOS devices.

While there have been rumors that Apple would like to move production of its custom ARM CPUs away from Samsung, there has been no indication that anyone other than Samsung has received orders for the A5 chip found in the iPhone 4S, or the A5X chip that powers the third-generation iPad.

Samsung announced last week that they they will be expanding their Austin, TX facilities for the purpose of increasing production of their “system-on-a-chip,” used in many mobile platforms, including Apple’s iOS devices.