Reuters reports that an article published by DigiTimes caused a 6.2-percent slump in Samsung Electronics shares, eliminating $10 billion off the company's market value. This was the company’s biggest daily fall in nearly four years, closing at a 9-week low of 1.23 million won ($1,100).
Just recently DigiTimes said that Apple placed large mobile DRAM orders with "troubled" Elpida's 12-inch plant in Hiroshima, Japan, thus securing around half of the facilities' total chip production. Once the report went live and the shares began to tank, Samsung reportedly moved the announcement of its new 20-nm DRAM chips -- originally scheduled for Monday -- up to yesterday, May 17, to "quell fears with investors and shareholders."
Naturally Samsung denies the DigiTimes report, claiming that Apple will still use its chips going forward. “The report from Taiwan is exaggerated. Apple is always looking to diversify its part-sourcing channels. In flat screens and chips, Apple is sourcing parts from various clients that include Samsung, however, that doesn’t mean we are losing our edge as Apple’s top-tier client," a Samsung executive told The Korea Times.
Other chip suppliers also took a hit in stock, including SK hynix who saw shares closing at almost 9-percent lower at a 20-week low -- this was the company's biggest one-day drop in nine months. A representative refused to comment on whether Apple had reduced orders from the firm, but merely stated that "we are receiving more orders for mobile DRAM chips from our customers."
U.S.-based Micron Technology is reportedly in talks with Elpida to acquire the Japanese firm as it tries to restructure its business. Tough market conditions and global competition drove it into bankruptcy protection.
"A merged Micron-Elpida could pose a significant threat to South Korean memory chipmakers, and Elpida's huge order from Apple was the spark that triggered these worries," said Lim Dol-yi, an analyst at Solomon Investment & Securities.
Another analyst claims that Apple is maintaining its bargaining power by keeping Elpida up and running, thus preventing Samsung and hynx from dominating the chip market.