Unravelling the Apple, Samsung, Qualcomm debacle

Article By : Rick Merritt

As Apple and Qualcomm become deeply entrenched in court battles, Samsung is reaping the benefits as it overtakes Intel as the world's biggest chipmaker.

Qualcomm slapped Apple with two court actions for six broad smartphone patents. Qualcomm wants damages and a ban on importing allegedly infringed iPhones. The actions are the latest in a set of related battles expected to take more than a year to lumber through the courts, so don’t fret about getting your iPhone 8 or 10 or whatever it will be called.

The good news is after the smoke clears in this ugly tussle, the industry might get some more clarity on the value of at least one set of mobile patents. It’s my hope the courts will provide some significant legal precedents around Qualcomm’s large and widely asserted portfolio.

Many have felt the strong arm of lawyers knocking on their doors claiming royalties and a churn in the gut over what’s fair. The lawyers and the stomachaches won’t go away because a top smartphone maker and its major SoC provider had a major break up.

The larger problem has long been that no one knows what a patent is worth until they take it to court. This difficult knot will take more than the muscle of Apple and Qualcomm combined to untie. But at least this battle of titans will provide an interesting distraction.

Meanwhile across the Pacific, Samsung is doing its happy dance. It just posted estimated quarterly revenues suggesting it is on track to be the world’s biggest chipmaker in 2017, leapfrogging Intel.

The results are largely thanks to the rise in solid-state drives and the prices of flash chips that go into them. Flash has a long runway ahead as it continues to replace hard drives in notebooks, PCs and servers after having knocked them out of the Apple iPod years ago.

The temporary shortages of flash and DRAM are gold for the Korean giant and a thorn in the shoe for every OEM buyer. Uncertainty over the fate of Toshiba and a recent manufacturing misstep at a Micron Taiwan fab exacerbate the short-term issues.

The memory sector is running at break neck speed to deliver ever-taller stacks of 3D NAND, so supply and demand will eventually rebalance, maybe next year. Eventually China will find its groove and start printing these little black coins, too.

When the smoke clears, it will be interesting to see what the semiconductor horizon looks like. Few will shed tears over Intel losing its bragging rights as king of the semiconductor hill, especially OEMs who grew thin bending metal around its x86 processors.

Given the volatility of memory prices, Samsung’s reign as the leader of the semiconductor industry may be short. It will be hard for any one company to build a franchise in any particular field of products or patents that ensures its dominance given we are tacking into the strange wind of a post-Moore’s law era.

The decline of CMOS scaling calls for a rebirth of creativity in electronics. The King is dead, long live the King!

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