Samsung slugs Apple with a 20% processor price hike

Samsung has recently slugged Apple with a 20% increase in price for its mobile processors, as hostilities continue between the two consumer electronics giants.

Since December last year, Samsung has manufactured Apple’s ARM-based A5 processors in its factory in Austin, Texas. The Korean electronics giant also manufactured a number of other Apple components, including LCD displays and memory chips for its popular iPhone, iPod and iPad devices.

However, relations between the two companies have cooled significantly over the past year, with Samsung overtaking Apple as the world’s largest smartphone vendor by unit shipments. Apple, in turn, has filed a series of patent violation lawsuit against Samsung, with a $US1 billion payment being awarded to Apple in a recent high-profile case, along with sales bans on key Samsung products in the US.

This has led Apple to examine switching its orders for memory chips, displays and processors away from Samsung, with Samsung Display recently cancelling a major LCD display contract with Apple. Apple had hoped that Taiwanese semiconductor firm Taiwan Semiconductor Manufacturing Company (TSMC) would be able to replace Samsung as a processor supplier.

However, according to The Wall Street Journal, Apple has been unable to find a replacement supplier able to supply it with the roughly 200 million processors it orders each year, meaning the company was forced to accept Samsung’s price increase.

Samsung Electronics has a long-term contract to supply Apple with processors until 2014.