Shares of Samsung Electronics Co. continued their slide Thursday morning on continued speculation that Apple Inc. may be buying fewer mobile memory chips from the South Korean giant after a media report said earlier this week Apple has placed large chip orders from failed Japanese chip maker Elpida Memory Inc.
Samsung shares fell as much as 2% in Thursday morning trade, but later recovered to move into the positive territory. The stock was last up 0.2% at KRW1,232,000. On Wednesday, Samsung shares lost 6.2% to KRW1.23 million, with market analysts citing concerns triggered by the media report.
Earlier this week, Taiwanese online trade publication Digitimes reported citing unnamed industry sources, that Apple has placed large orders for DRAM chips for its mobile gadgets with Elpida. Japan’s only DRAM chip maker filed for bankruptcy protection in late February and is currently undergoing rehabilitation. U.S. chip maker Micron Technology Inc. said last week that it is in talks to acquire Elpida.
Samsung is the world’s biggest producer of dynamic random access memory chips widely used in personal computers and mobile gadgets by revenue.
The Korea Economic Daily reported citing Samsung Chief Operating Officer Lee Jae-Yong as saying that he doesn’t expect Apple’s reported orders with Elpida, if accurate, to have any impact on his company’s business. Considering that Elpida is already a supplier of mobile DRAM chips to Apple, it is unlikely that Apple has suddenly hugely increased its orders, unlike what the Digitimes has reported, Lee was quoted as saying.
Regarding share price declines which analysts attributed to the Digitimes report, a Samsung spokesman said the company doesn’t comment on market speculations. He also declined to comment on the relationship between Samsung and Apple.
The Digitimes report came at a time when the battle between Apple and Samsung is intensifying in the fast-growing market for smartphones, the most important product category that has been driving earnings growth at both companies.
The two companies are also locked in a fierce patent battle across the globe, each alleging that the rival violated its patents. The lawsuits, which now span over 10 different countries, have raised concerns in the market that Apple and Samsung’s tight-knit relationship might be in jeopardy.
Apple buys many components from Samsung, which is among the world’s largest suppliers of chips and other key parts for smartphones and tablet computers.
Apple and Elpida officials couldn’t immediately be reached for comment.
Mizuho Investors Securities analyst Yuichi Ishida, who covers the chip industry, said if Elpida is indeed getting more orders, it would fuel speculation that Apple is trying to reduce its overall dependence on Samsung’s components.