By Kim Yoo-chul
Samsung Electronics has agreed with LG Electronics and Apple to supply advanced DRAM chips for their new range of smartphones, two people familiar with the deal said Monday.
Estimated to be worth billions of dollars, the deal may signal the start of a thaw in the recent icy relationship between Samsung Electronics and Apple, as well as LG Electronics and Samsung Electronics.
Samsung and Apple have recently agreed to drop a number of cases against each other everywhere but in the U.S. where they continue to battle over patents. Samsung Electronics also had a legal tussle with LG Electronics over the latter's alleged vandalism of Samsung washing machines at a trade fair.
"Under the agreement, Samsung will start providing LG Electronics with 100 percent mobile DRAM chips it needs for LG G4 smartphone, which will be unveiled in April. Also, Samsung will handle at least half of the amount that Apple needs for its new iPhone ― tentatively named iPhone 6S," an industry official who is familiar with the deal told The Korea Times.
Apple may ask more from Samsung to supply the chips depending on the situation, he said.
Samsung Electronics' handset division also separately agreed with the company's semiconductor division to use its in-house mobile DRAM chips for the Galaxy S6.
Another official said the contract will last at least for a year. "Samsung has no problems meeting growing client demand for advanced mobile DRAM chips," he said.
Booming memory business
He said the deal is bad news for SK hynix of which mainstream mobile DRAMs use 25-nanometer processing level technology.
"This is really a huge deal. This means Samsung's chip business is booming riding high on its technologies that are far ahead of its rivals," said Hwang Joon-ho at KDB-Daewoo Securities.
The agreement comes a few months after Samsung, the world's biggest memory chip supplier, began mass production of the next generation memory chip ― the 8-Gigabit LPDDR4 (low power double data rate) mobile DRAM with 20 nanometers.
The so-called LPDDR memory, the most used in mobile devices, is poised to enable a new technological leap for premium smartphones.
This new DRAM offers twice the density and performance compared to the LPDDR3 4-gigabit.
"People are saying that the big three ― Samsung, SK hynix and Micron Technology of the United States ― will see new orders rising in the global semiconductor industry. Samsung is pressuring its chief rivals with higher technology and productivity," said Hwang.
A senior LG Electronics executive confirmed that its G4 will use Qualcomm's Snapdragon 810 processors and mobile DRAM chips supplied by Samsung Electronics.
However, he said the agreement doesn't necessarily mean that the souring ties between the two long-time rivals will be mended immediately.
In a related note, Apple has chosen Samsung to provide mobile processors that will be used to power the upcoming iPhone 6S which is to be released later this year.
For applications, Samsung will be responsible for 80 percent of the production of the A9 chipset, while Taiwan Semiconductor Manufacturing Company (TSMC) will take care of the remaining 30 percent.