Samsung value drops $10B as investors fear it being cut out of Apple supply chain
Concern that Samsung could lose orders for dynamic random access memory from Apple caused the company's stock to drop 6 percent on Wednesday.
Rumors from DigiTimes, the Taiwanese technology publication, suggested that Apple has placed huge orders with Elpida, a chipmaker in Japan. That caused concern that Apple was moving its DRAM business away from Samsung, and Samsung's market value fell by $10 billion, according to Reuters.
Industry watchers have speculated that Apple placed the orders with Elpida in an effort to keep the company running and ensure competition in the market. The Japanese chipmaker has struggled of late, and U.S.-based Micron Technology Corp is currently in talks to acquire the business.
Samsung's stock troubles on Wednesday also came as a pair of reports from The Wall Street Journal and Reuters said that Apple had tapped a trio of suppliers to supply larger 4-inch screens for its sixth-generation iPhone. Noticeably absent among those three companies was Samsung, which is one of Apple's chief suppliers of LCD displays.
In fact, Samsung was the sole supplier of Retina displays for Apple's new iPad when it launched in March. Samsung also builds the custom A5X chip that powers the new iPad, along with other key components.
Discrete DDR2 RAM modules, in this case Samsung-sourced. | Source: Chipworks
Reports have suggested for some time that Apple wants to reduce its reliance on Samsung for components, as in addition to being a parts supplier, the company is also one of Apple's fiercest rivals. In addition to competing in a number of markets, the two companies are also involved in a series of lawsuits accusing one another of patent infringement.
Rumors from DigiTimes, the Taiwanese technology publication, suggested that Apple has placed huge orders with Elpida, a chipmaker in Japan. That caused concern that Apple was moving its DRAM business away from Samsung, and Samsung's market value fell by $10 billion, according to Reuters.
Industry watchers have speculated that Apple placed the orders with Elpida in an effort to keep the company running and ensure competition in the market. The Japanese chipmaker has struggled of late, and U.S.-based Micron Technology Corp is currently in talks to acquire the business.
Samsung's stock troubles on Wednesday also came as a pair of reports from The Wall Street Journal and Reuters said that Apple had tapped a trio of suppliers to supply larger 4-inch screens for its sixth-generation iPhone. Noticeably absent among those three companies was Samsung, which is one of Apple's chief suppliers of LCD displays.
In fact, Samsung was the sole supplier of Retina displays for Apple's new iPad when it launched in March. Samsung also builds the custom A5X chip that powers the new iPad, along with other key components.
Discrete DDR2 RAM modules, in this case Samsung-sourced. | Source: Chipworks
Reports have suggested for some time that Apple wants to reduce its reliance on Samsung for components, as in addition to being a parts supplier, the company is also one of Apple's fiercest rivals. In addition to competing in a number of markets, the two companies are also involved in a series of lawsuits accusing one another of patent infringement.
Comments
Hopefully this will spark an Internet-wide boycott of DigiTimes.
DIGITIMES!!
I thought Investors knew better....
Quote:
Originally Posted by SolipsismX
Where are the posters that said Samsung doesn't need Apple and should stop manufactuing Apple's chip designs to teach Apple a lesson?
There were people who said that? I only remember the opposite…
Cutting Samsung out of their supply chain (as much as possible) would be a much better tact that the lawsuits, IMO. Lawsuits drag on and are creating a negative public perception. Moving to alternative suppliers is just a business decision and will hit Samsung harder. Without overtly making it an issue in their supplier relationships, they could certainly use this to encourage more ethical behavior from Samsung with regard to aping Apple products.
Quote:
Originally Posted by Tallest Skil
There were people who said that? I only remember the opposite…
There were. I don't recall it here but have seen it quite frequently on other boards. Mostly from kids too ignorant to realize that Apple is, in many ways, the most important customer Samsung has and that not supplying Apple would hurt them more than it would hurt Apple. Apple can fund other suppliers to ramp up if needed to replace Samsung. Samsung can't make other companies buy from them at the same levels that Apple does.
Sorry, was too busy at work doing productive things than doing a lighting fast response on AI.
My presence is known. Happy?
To believe a rudimentary "publication" like dignities says a lot about the character of those who fall for its "facts" and "insider knowledge".
Quote:
Originally Posted by Tallest Skil
There were people who said that? I only remember the opposite…
Are you kidding? Fandroids say that all of the time. You have to realize that in the demented and corrupted mind of a Fandroid, Apple is not an innovator and it is thanks to Samsung that Apple is able to make the products that they do.
As for Samsung's value dropping, well, shit happens. I've said it before, but anybody who believes in rumors coming from Digitimes can't be all that bright, and there are apparently a lot of really dumb people out there.
Quote:
Originally Posted by SolipsismX
Where are the posters that said Samsung doesn't need Apple and should stop manufactuing Apple's chip designs to teach Apple a lesson?
Seriously! If a rumor from a source known to be unreliable can cause a 6% drop, investors don't have much confidence at all. Hard to make that argument now. I'm sure some will, though.
Quote:
Originally Posted by BigBillyGoatGruff
Seriously! If a rumor from a source known to be unreliable can cause a 6% drop, investors don't have much confidence at all. Hard to make that argument now. I'm sure some will, though.
I have this theory that some investors are taking money from various stocks (even Apple), to get money for friday and FB.
Quote:
Originally Posted by Tulkas
There were. I don't recall it here but have seen it quite frequently on other boards. Mostly from kids too ignorant to realize that Apple is, in many ways, the most important customer Samsung has and that not supplying Apple would hurt them more than it would hurt Apple. Apple can fund other suppliers to ramp up if needed to replace Samsung. Samsung can't make other companies buy from them at the same levels that Apple does.
Considering the billions Samsung have poured into manufacturing capacity for Apple (I've spent many months working in Samsung factories that are producing chips only for Apple), it's more likely they would stop making phones themselves, than stop making devices for Apple.
Quote:
Originally Posted by melgross
I don't even care about what's happening with Samsung's stock. It will come back up. What I'm concerned about is why Apple's stock is dropping so much, with another almost $12 today. There's no good reason for this to be happening.
The economy generally is in a shaky patch, so all stocks are down. Until Greece gets kicked out of the Euro, and the Eurozone sort themselves out, the markets aren't going to be doing much for a reason.......
can't Samsung sue Digitimes? 6% drop because of a rumor that's terrible.
Quote:
Originally Posted by PaulMJohnson
The economy generally is in a shaky patch, so all stocks are down. Until Greece gets kicked out of the Euro, and the Eurozone sort themselves out, the markets aren't going to be doing much for a reason.......
Not true for all stocks. While Apple was declining today, GOOG shot up almost 3 freaking percent.
Quote:
Originally Posted by Apple ][
Not true for all stocks. While Apple was declining today, GOOG shot up almost 3 freaking percent.
I wonder how much GM saying they aren't going to advertise on Facebook impacted that?
Effectively, in the absence of specific news for Apple, they will follow the general market at the moment.
He should know because it was one of his iterations that said it lol
WhooooHoooo YEAH!!!!