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Samsung Lost £6.3 Billion After Apple Switched Suppliers

Samsung is in a bit of a tough spot after Apple placed huge orders for mobile dynamic random access memory (DRAM) with Japanese company Elpida, instead of relying on the South Korean manufacturer.

As a result, Samsung Electronics lost $10 billion (£6.3 billion) of its market value. According to a Reuters report, the South Korean company is down by 6.2 per cent - the stock's lowest price in nine weeks.

This makes it the worst single-day drop in the last four years. Choi Do-yeon, an analyst at LIG Investment & Securities, explained Apple's strategy.

"It looks like Apple doesn't want to see Samsung and hynix dominate the chip market. Apple wants to maintain its bargaining power by keeping Elpida running," pointed out Choi Do-yeon.

As we've reported earlier, Elpida is in serious financial trouble. US company Micron Technology Corp is bidding to sponsor the Japanese DRAM maker.

Rumours say Apple is behind the deal as they are looking to weaken Samsung's efforts. Analysts commented that Samsung is already facing pressure from offshore investors who are re-evaluating the risks.

The latest reports about Elpida's revival with Apple's help was " the straw that broke the camel's back," believes Rhoo Yong-suk, analyst at Hyundai Securities.

Source: Reuters

Radu has been working as a freelance writer for more than five years and has been blogging around since 2004. He is interested in anything Apple as well as gaming and mobile applications.