Samsung Launches New DRAM Chips Early After Shares Slide on Apple-Elpida Alliance Rumors


Amid investor fears over the possibility of Samsung losing its spot as a key supplier to Apple, Samsung today, announced the launch of its next generation DRAM chips, based on 20-nanometer process technology with a storage capacity of 4GB.

These chips would be thinner and more power efficient than before, while at the same time delivering better performance.

In addition to the official announcement made via a press release, The Korea Times reports that the company is already selling these chips to Apple, based on coversations with anonymous Samsung executives:

Samsung executives said that the company has already supplied the chips to Apple. “Apple is definitely using the chips,” a ranking Samsung executive said, asking not to be named.

Apple is the company’s biggest client in parts, and is expected to buy $11 billion worth of chips and flat-screens this year.

Samsung’s stock took a huge hit, wiping off more than $10 billion in market value, after, rarely accurate Taiwanese publicationDigiTimes published a report that claimed Apple had placed a large order for DRAM chips with Elpida – a Samsung competitor. The stock nosedive seems to have prompted Samsung to announce the production of these DRAM chips ahead of schedule. (The announcement was originally meant to go live on Monday.)

Samsung on its part calls the DigiTimes report “exaggerated”:

“Samsung is increasing the output of mobile DRAMs using a finer 36-nanometer processing technology for Apple as planned. It doesn’t have plans to reduce production of the chips,” said another senior Samsung executive in a telephone interview with The Korea Times.

“The report from Taiwan is exaggerated. Apple is always looking to diversify its part-sourcing channels. In flat screens and chips, Apple is sourcing parts from various clients that include Samsung, however, that doesn’t mean we are losing our edge as Apple’s top-tier client,” said the executive.

The whole incident shows the extent to which suppliers’ revenues depend on Apple. Despite Samsung being a leader in the smartphone market, its stock and its market value are highly sensitive to Apple’s decisions.

[via TNW]