Loss of Apple chip contract sees Samsung value decline

Karen Haslam
21 May, 2012
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Samsung shares slipped after a report appeared claiming that Apple has switched its chip supplier to Elpida from Samsung.

We reported back in March that the RAM inside the new iPad is 1GB DRAM comprised of two 4GB Elpida LP DDR2 parts.

Now DigiTimes has reported, citing industry sources, that Apple has placed large orders for DRAM with Elpida. The orders apparently account for half the Elpida’s total chip production at its Hiroshima, Japan plant.

It is claimed that Samsung lost US$10 billion of its market value following news that Apple switched suppliers‎. Last week’s decline was the biggest daily fall in nearly four years for Samsung.

“It looks like Apple doesn’t want to see Samsung and hynix dominate the chip market. Apple wants to maintain its bargaining power by keeping Elpida running,” LIG Investment & Securities analyst Choi Do-yeon told Reuters.

Citing lower-than-anticipated sales memory supplier Elpida is currently seeking a US$1.2 billion lifeline from the Japanese government.

Micron Technology Corp, reported to be talks to acquire Elpida’s business, saw its stock rise on the report that Elpida had secured Apple’s contract.

To make matters worse for Samsung, Apple has won an appeal in its patent battle with Samsung, taking it closer to an injunction on Samsung’s Galaxy Tab 10.1. The court had initially rules against Apple’s claims, but the appeals court disagreed with the earlier ruling that the patent in question should not have been granted to Apple, reports Reuters.

Apple and Samsung are currently locked in a dispute over patent infringement in dozens of countries around the world, with Apple claiming that Samsung’s Galaxy Tab 10.1 infringes on several patents it owns.

On 1 May, Apple filed a motion alleging that Samsung intentionally destroyed documents it was obligated to hand over as part of the discovery process, an act referred to as “spoilation of evidence” in the legal parlance.

Apple and Samsung Electronics have agreed to attend a settlement conference in the ongoing patent lawsuit between the two companies, according to court documents.


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