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Friday, 7 September 2012 - Apple cuts memory chip order to Samsung for new iPhone: source |
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See the best of Reuters photography.  See more | Photo caption  Putin vs. the wild A look at Russian President Vladimir Putin, a man of the wilderness.  Slideshow  Colombia's FARC war Colombia and the rebel group FARC are negotiating in the hopes of ending an almost 50 year long war.  Slideshow  Apple cuts memory chip order to Samsung for new iPhone: source Tweet Share this Email Print Related News Apple cuts memory chip order to Samsung for new iPhone: source Thu, Sep 6 2012 REFILE-UPDATE 1-Samsung challenge: sold the phone, how to keep the customer Thu, Sep 6 2012 Apple sets September 12 event, latest iPhone expected Tue, Sep 4 2012 Samsung's crisis culture: a driver and a drawback Sun, Sep 2 2012 Sharp's output of new iPhone displays lagging -source Fri, Aug 31 2012 Analysis & Opinion Apple and the burden of being a behemoth Related Topics Tech » Media » iPad » An Apple logo is seen at the Apple Worldwide Developers Conference 2012 in San Francisco, California June 11, 2012. Credit: Reuters/Stephen Lam SEOUL | Thu Sep 6, 2012 10:31pm EDT SEOUL (Reuters) - Apple Inc has reduced its orders for memory chips for its new iPhone from its main supplier and competitor Samsung Electronics Co, a source with direct knowledge of the matter said on Friday. South Korea's Samsung is a core Apple supplier, producing micro processors, flat screens and memory chips - both dynamic random access memory (DRAM) chips and NAND memory chips - for the iPhone, iPad and iPod. Apple has been cutting back its orders from Samsung as it seeks to diversify its memory chip supply lines, although the South Korean firm remains on the list of initial suppliers for the new iPhone, the source told Reuters. The person declined to be named because the negotiations are confidential. The Korea Economic Daily, citing an unnamed industry source, reported on Friday that Apple had dropped Samsung from the list of memory chip suppliers for the first batch of the new iPhone, the iPhone 5, which is widely expected to be unveiled next Wednesday. The report said Apple instead picked Japan's Toshiba Corp, Elpida Memory and Korea's SK Hynix to supply DRAM and NAND chips. "Samsung is still on the list of initial memory chip suppliers (for new iPhones). But Apple orders have been trending down and Samsung is making up for the reduced order from others, notably Samsung's handset business," the Reuters source said. Samsung's handset business, led by robust sales of its flagship Galaxy line of products, has become the most important earnings pillar, bringing in around two-thirds of Samsung's overall profit, and is driving sales of component - from memory chips to micro processors and displays. Samsung, the world's top smartphone maker, said on Thursday that sales of its Galaxy S III smartphones topped 20 million since its late-May debut. The source denied market speculation that the reduced orders from Apple were prompted by a souring relationship between the two companies, which are locked in global patent disputes, and said Apple had already been looking to widen its supply chain. Bernstein analysts estimate Apple's purchases of mobile DRAM and NAND chips from Samsung have fallen significantly and now only account for around 2.5 percent of Samsung's 2012 earnings. DIVERSIFICATION California-based Apple frequently faces a supply crunch when a new product is launched, triggering a consumer stampede that drives demand far in excess of supply and production capability. Earlier this year, a source told Reuters that Elpida was selling more than half of its mobile DRAM chips to Apple. For batteries used in the next iPhone, Apple picked China's Amperex Technology Ltd and Japan's Panasonic Corp, dropping Samsung SDI from the initial supplier list, the Korea Economic Daily said. In flat-panel displays, LG Display is one of the dominant suppliers for the new iPhone, according to sources close to the matter, as Japan's Sharp Corp has fallen behind schedule on iPhone display production. Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry. Apple won a landmark victory last month after a U.S. jury found the South Korean firm had copied key features of the iPhone and awarded Apple $1.05 billion in damages. Samsung declined to comment and Apple was not immediately available to comment. Still, Samsung remains the sole producer of Apple-designed micro chips that power the iPhone and iPad, making their relationship too important for either party to put at risk. Samsung's component sales could hit $13 billion next year and bring in $2.2 billion in operating profit, according to a recent estimate by Morgan Stanley. That's nearly 8 percent of estimated group operating profit. Shares in Samsung rose more than 4 percent on Friday to a 2-week high - and set for their biggest one-day gain in 6 weeks. The gain was broadly in line with a technology sector rally after a maker of solid-state drives, which uses flash memory chips, warned of component shortages, raising expectations that production cutbacks have stopped a slump in prices for flash memory chips. SK Hynix shares jumped 6.2 percent and, in Tokyo, Toshiba gained 4.3 percent. (Reporting by Miyoung Kim; Editing by Richard Pullin and Ian Geoghegan) Tech Media iPad Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints   We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.   Edition: U.S. Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom Back to top Reuters.com Business Markets World Politics Technology Opinion Money Pictures Videos Site Index Legal Bankruptcy Law California Legal New York Legal Securities Law Support & Contact Support Corrections Connect with Reuters Twitter   Facebook   LinkedIn   RSS   Podcast   Newsletters   Mobile About Privacy Policy Terms of Use AdChoices Copyright Our Flagship financial information platform incorporating Reuters Insider An ultra-low latency infrastructure for electronic trading and data distribution A connected approach to governance, risk and compliance Our next generation legal research platform Our global tax workstation Thomsonreuters.com About Thomson Reuters Investor Relations Careers Contact Us   Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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