Samsung's Market Cap Takes $10 Billion Hit Amid Rumors of Apple DRAM Deal with Elpida
Digitimes' poor track record has been thrust into the spotlight in recent days, but that hasn't stopped one of the Taiwanese news site's reports from having a major effect on stock prices for Samsung and Hynix. The report from earlier this week claims that Apple has placed "huge" orders for DRAM chips with Elpida, soaking up half of the capacity at the firm's main plant in Hiroshima, Japan.
1 GB of Elpida DRAM in third-generation iPad (Source: iFixit)As
noted by Reuters, the rumor has had a significant effect on fellow DRAM manufacturers Samsung and Hynix, with Samsung losing $10 billion in market value today in a 6% stock decline. The smaller Hynix was down nearly 9%
"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," said Choi Do-yeon, an analyst at LIG Investment & Securities.
Elpida filed for bankruptcy in late February, and Micron has emerged as a likely acquirer for the company. The combined Micron-Elpida would be a strong competitor in the DRAM market, sparking concerns for others in the competitive industry.
DRAM, the volatile memory used to hold active applications and other data for use while a device is in operation, is a commodity in the consumer electronics market, with Apple routinely sourcing from multiple suppliers and shifting orders to achieve the best pricing.
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Top Rated Comments
How is it misleading? It specifically says Samsung's market cap, which is indeed what dropped by $10 billion.
I see what you did there! :D
And screen components! A lot of Samsung's equipment is second to none. It's a pity the relationship between them and Apple has become so sour.
Good for Apple and Elpida. Especially good for Micron if they do acquire Elpida.
In the old days I used to buy all my memory from Micron.
How many times have they gone to other vendors only to come back to Samsung.
Let's face it, Samsung makes some of the finest semiconductor components in the industry.
Apple has always been about delivering a quality finished product.
This means using quality components.
If Elpida cannot provide that same level of quality, Apple will be the one taking the customer satisfaction hit.