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Samsung is Reported to Have Hit Apple with 20% Price Increase on iOS Device Chips

Samsung is Reported to Have Hit Apple with 20% Price Increase on iOS Device Chips

MarketWatch is reporting that Samsung has hit Apple with a 20% price jump on the A-series chips used in the Cupertino company’s iOS devices, citing a person familiar with negotiations between the two tech giants.

MarketWatch, vis MacRumors:

“Samsung Electronics recently asked Apple for a significant price raise in (the mobile processor known as) application processor,” the person was quoted as saying in the report. “Apple first disapproved it, but finding no replacement supplier, it accepted the (increase.)”

The same source says that the two firms have started to reflect the new supply pricing recently.

Even though Apple’s latest chips, (the A6 and A6X), are the company’s own custom, in-house designs, Samsung continues to act as the fabricator for manufacturing the chips, which are used throughout the iOS line of devices.

A bill of materials estimates have pegged the cost of an A6 chip at around $17.50, meaning that a 20% increase in price would translate to a roughly $3.50 increase in per-unit costs for Apple.

It has been reported in recent years that Apple has been attempting to move chip production to another company, (TSMC), but so far has been unable to make the move. TSMC is reported to have a 20-nanometer process targeted for mass-production in late 2013, which could factor into any move Apple may make.

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