Samsung experiencing some growing pains, has trouble making deals with Qualcomm and Hynix

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Published 29 May 2013

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Samsung is seen as this mighty component manufacturer who can make just about anything the electronics industry needs, but that image might soon become a bit tarnished. Two articles have appeared in The Korea Herald that shed some light on the company’s inability to make enough chips.

The first article deals with Samsung’s relationship with Qualcomm. Apparently Samsung gives Qualcomm 5,000 silicon wafers every month. For those who don’t know, computer chips are cut out of a large pizza pie shaped piece of silicon called a wafer. Qualcomm originally wanted twice the number of wafers, but Samsung couldn’t make that happen. The two companies renew their contract on a yearly basis, and it’s almost time to ink a new agreement. This time Qualcomm hopes to get between 20,000 to 30,000 wafers, but again, Samsung simply can’t do that.

The second article is even more bizarre. Samsung themselves say they make 70% of the RAM chips that go inside every smartphone sold today. You’d think they’d be happy with that, right? Well, you’re wrong. Samsung wanted to buy even more mobile RAM from Hynix, the world’s second largest memory maker, but the two companies couldn’t come to an agreement. Samsung wanted more than Hynix could produce, and besides, Samsung wasn’t willing to give them a good price.

Make no mistake, Samsung is still easily the world’s largest component maker, but they’re not growing as fast as the industry that they’re now dominating. Funny how that happens.