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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.

elpida sdram ipad 3
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.

Top Rated Comments

WildCowboy Avatar
181 months ago
Headline's a bit misleading, samsung hasn't taken a "$10 billion hit".

How is it misleading? It specifically says Samsung's market cap, which is indeed what dropped by $10 billion.
Score: 18 Votes (Like | Disagree)
181 months ago
any chance this could also be apple penalizing samsung in lieu of their ongoing legal battles?
Score: 15 Votes (Like | Disagree)
181 months ago
This story isn't really about the stock market. It has larger ramifications.

I see what you did there! :D
Score: 13 Votes (Like | Disagree)
NutsNGum Avatar
181 months ago
Apple will be back.
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.

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.
Score: 10 Votes (Like | Disagree)
Peace Avatar
181 months ago
If this is true and Apple goes with more vendors then samsung has something more to worry about.


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.
Score: 10 Votes (Like | Disagree)
rjohnstone Avatar
181 months ago
If samsung loses one of it's biggest customers it will affect their bottom line.
Apple will be back.
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.
Score: 9 Votes (Like | Disagree)
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