Apple securing $7.8 billion worth of Samsung displays, memory?

A report says the two companies are working out a deal to make Apple Samsung's largest components customer. Is this the supplier deal Apple hinted about last month?

Apple iPad
Sarah Tew / CBS Interactive

When Apple announced earnings last month , the company's CFO mysteriously dropped a bit of info about a big contract the company signed worth $3.9 billion. He declined to elaborate further except to say that it was for product components that Apple feels will be central to its future products.

It's not unusual for Apple to sign large contracts with suppliers to ensure its own access to certain components as well as make it difficult for its competitors to get similar parts. Apple did it with LG for displays two years ago, and is regularly the largest buyer of flash memory in the world.

Still, CFO Peter Oppenheimer's sly mention got the guessing game going as to what for and with who this contract could be. Today we have a hint. The Korea Economic Daily reports today that Samsung and Apple are working on a contract agreement worth $7.8 billion. Apple would reportedly get a variety of components in return: LCD panels, processors for mobile devices, and flash memory. Samsung and Apple have worked together often, but this would make Apple Samsung's largest customer, according to the report.

Now, $7.8 billion is exactly twice the $3.9 billion Apple mentioned last month. It could be that half of the Samsung order Apple is placing, or $3.9 billion of it, is going toward one specific component, like high-resolution displays. It's widely assumed that those parts from Samsung are for future models of iPhones and iPads. Touch screens and high-resolution displays are key ingredients to both products.

About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.

 

Join the discussion

Conversation powered by Livefyre

Show Comments Hide Comments
Latest Galleries from CNET
The best 3D-printing projects of 2014 (pictures)
15 crazy old phones from a Korean museum (pictures)
10 gloriously geeky highlights from 2014 (pictures)
2015.5 Volvo XC60: updated tech, understated design
Busted! CNET readers show us their broken devices (pictures)