Samsung's 4Gb mobile DRAMs

By Kim Yoo-chul

Samsung Electronics said Thursday that it’s been producing ultra-thin mobile memory chips based on 20-nanometer level technology since mid-April, dismissing market concerns that the impact of an Apple-Elpida partnership could hurt the Korean company.

In a statement, Samsung said it began supplying 4Gb mobile DRAMs using the technology to customers amid the rising popularity of data-intensive and Web-connected devices such as smartphones and tablets that need faster data-downloading speed.

Industry officials said that the company has already supplied the chips to Apple. ``Apple is definitely using the chips,’’ a ranking industry official said, asking not to be named.

Apple is the company’s biggest client in parts, and is expected to buy $11 billion worth of chips and flat-screens this year.

The press release was scheduled to be released Monday but Samsung changed its schedule as it needs to soothe market concerns over the impact on the Apple-Elpida tie-up, according to officials.

On Wednesday, Samsung lost 6 percent of its market value, or some $11 billion after a report from Taiwan said Apple will reduce the use of its chips since Japan’s Elpida signed a contract to supply over 50 percent of its mobile DRAM chips for ``i-branded’’ products late last year.

``Samsung is increasing the output of mobile DRAMs using a finer 36-nanometer processing technology for Apple as planned. It doesn’t have plans to reduce production of the chips,’’ said another senior industry official in a telephone interview with The Korea Times.

``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,’’ said the official.

In the technology field, clients mean everything. The news from Taiwan stoked concerns among Samsung investors that Apple wants to help the bleeding Elpida, now in bankruptcy protection, to become a much bigger supplier to the iPhone maker.

``Apple is trying to cut its heavy dependence on Samsung components, however, Samsung is the planet’s sole firm that can currently guarantee product commitment, better pricing and faster delivery,’’ said the official who is very familiar with the issue.

Samsung said the company is trying its best to supply qualified and technologically advanced parts to clients and stressed its ongoing stronger partnership with Apple will continue due to strategic reasons.

Apple is facing supply constraints with its popular iPhone sales jumping to 35.1 million in the first quarter of this year, pushing market analysts to conclude that it is more worried about a free-flowing supply chain than reliance on Samsung and SK hynix.

``The report from Taiwan isn’t new as Elpida has already been supplying high-end chips to Apple. Samsung and SK hynix stock investors overreacted about the news,’’ said Song Myeong-sup, an analyst at Hi Investment & Securities, adding Elpida is accepting Apple’s drastic price-cut demands as part of a desperate attempt to raise cash.