hankyoreh

By Kim Jin-cheol, staff writer
In the global mobile DRAM market, Samsung Electronics reigns supreme. Statistics compiled by market surveying company DRAMeXchange indicate that the Korean giant enjoyed a market share of 70.9% in the first quarter of this year. [DRAM stands for Dynamic Random Access Memory, an important component in smartphones.]
In Q1 of this year, Samsung Electronics posted record-breaking operating profits of 5.85 trillion won (about US$5.1 billion). 73% of these impressive earnings are attributable to the company’s Galaxy smartphones, which occupy the number one spot in the smartphone market. Vice chairman Kwon Oh-hyun, who leads Samsung Electronics’ semiconductor operations, said, “Memory chip technology has developed as far as it can, so the only thing to do is reduce costs. But when it comes to mobile semiconductors there is so much that can be done.”
Samsung Electronics share prices fell on May 16 after reports that Apple had ‘betrayed’ Samsung. When Taiwan’s Digitimes reported on May 15 that Apple had placed a large DRAM order with Japan’s Elpida Memory, Samsung was reportedly unhappy with the move. Analysts at investment bank UBS said, “It has been confirmed that the volume of DRAM production at Elpida’s Hiroshima plant at the end of April was higher than that at the end of March. Most of this consisted of DRAM, which may indeed have been ordered by Apple.”
US firm Micron is being talked about as a strong contender to acquire Elphida, a Japanese semiconductor manufacturer which has gone into receivership. Seen together, Apple’s increased orders to Elphida and the possibility of Micron taking over the memory maker can be interpreted as unfavorable to Samsung Electronics. The view in the industry is that there may be changes in mobile DRAM market shares if Micron does acquire Elphida. A change in Apple’s trading lines can only be interpreted as something that will hinder Samsung Electronics, its direct competitor in the smartphone market.
Not everyone is convinced of Apple’s supposed ‘betrayal’. Samsung Chief Operating Officer Lee Jae-yong, talking to one business newspaper, said, “It’s clearly a false report. Elphida is already supplying mobile DRAM to Apple.” Even if the report is correct, most market analysts judge that the impact on Samsung Electronics will not be great.
“Since Elphida was already supplying around 50% of Apple’s requirement for mobile DRAM, news reports that Apple will in future be taking half of what is produced on the Hiroshima line merely mean that Apple is set to maintain its existing order proportions,” explained Song Myeong-seop, an analyst at Haitujajeunggwon.
Nonetheless, after plummeting by 6.18% on May 16, Samsung Electronics shares dropped another 0.57% yesterday, despite an overall rebound in the market. SK Hynix shares, which slid on the same day for the same reason, rallied by 6.29% yesterday.
“It’s natural that Apple, which has to fight against Samsung when it comes to mobile devices, is plotting a big change in procurement,” said one semiconductor industry official. “It’s possible, moreover, that Apple will support Japan’s Elphida in order to keep Samsung Electronics’ oligopoly in check.”
　
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