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Comment by cloudwalking | Hacker News Reader

> Samsung Electronics has a long-term contract to supply APs to Apple until 2014

But Samsung was able to raise the price in the middle of the contract? Is this typical?

That is what I thought. Samsung must have had a stipulation saying if outside suppliers raised their prices they could pass along the cost. I highly doubt this was just Samsung looking for more profit. It would also explain Apples willingness to agree to the deal, if they believed that the cost of unobtanium went 20% up. Does not matter if they go with chip manufacturer X or Y, The supply cost will remain constant (if not more with the little guy, since he cant buy in the bulk Samsung can)

Must be a term in the contract to allow Samsung to do so. My guess: likely that Apple is ending the contract early, and the term is the way for Samsung to cover its investment in the chip plant.

Hasn't Apple been pumping huge amounts of money to allow their manufacturers to make these plants though? Surely the investment is from both sides? I'm trying to angle for a reason why they would go ahead an trigger a clause when they easily have enough money to do whatever.

Aside: I am always surprised with the other comments. Do people really think there aren't a bunch of terms on a multi-billion dollar contract limiting what you can do?

It might just be Apple invoking an early out clause.

I think that's more likely, considering all the rumors that Apple is planning on opening their own chip fabs.

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