Samsung Loses $10 Billion in Market Value After DigiTimes Reports Apple Is Ordering DRAM From a Competitor

Reuters:

Shares in Samsung Electronics Co slumped more than 6 percent on Wednesday, wiping $10 billion off the electronics giant’s market value, on a report that Apple placed huge chip orders with troubled Japanese chip rival Elpida.

Taiwan’s DigiTimes, an online trade news site, reported that Apple recently placed large mobile dynamic random access memory (DRAM) orders with Elpida’s 12-inch plant in Hiroshima, Japan, securing around half the facilities total chip production. It cited unnamed industry sources in its report, which hit shares of major chip suppliers to Apple.

This highlights the bizarre relationship between Apple and Samsung, where in the consumer space they’re direct competitors (arguably even arch rivals — they’re the only two companies turning a significant profit in the handset industry), but behind the scenes in Samsung’s component supplier business, Apple is their most important customer. I suspect this is what investors are reacting to. It’s not about one order of DRAM; it’s about concern that Samsung is going to lose Apple as a component customer across the board.

Funny, too, that this would happen the day after Harry McCracken’s epic DigiTimes fact-checking piece. I question anything DigiTimes reports. I’d double-check if they told me today is Wednesday. But regardless of whether the report is actually true, it is true that Samsung’s stock price took a dive because of it.

★ Wednesday, 16 May 2012