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Samsung's Market Cap Takes $10 Billion Hit Amid Rumors of Apple DRAM Deal with Elpida

rjohnstone said:
Explain the "larger ramifications".
Elpida lacks the production capacity of Samsung and their QA has not been the best in the past few years.
Click to expand...
The memory market is
1 Samsung
2 Hynix
3 Elipda
4 Micron

Elipda was charging about $0.70/gb when it went BK due to excessive debt. Micron charges about $1.20/gb and it uses equity finance. It was thus able to buy Elipda in BK for $2.5B and outbid Hynix and others.

This will make the combined Microm/Elipda be #2 in the market with about 70-80% the manufacturing capacity of Samsung.

Elipda makes memory for iPad 3 and Micron makes memory particularly newer DDR4 later this year suitable for BOTH portable AND server applications. That's Apple's sweet spot.

So it is not surprising they will contract for as much as they can buy. However Apple is supply challenged on memory generally (hence crippled-minimalist hardware) and still Needs Samsung and Hynix as well for the ramp into China.

This is not a one or the other thing, so buy Samsung and Hynix stock on weakness.

Rocketman
 
Peace said:
If samsung loses one of it's biggest customers it will affect their bottom line.
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Apple will be back.
How many times have they gone to other vendors only to come back to Samsung.
Let's face it, Samsung makes some of the finest semiconductor components in the industry.
Apple has always been about delivering a quality finished product.
This means using quality components.
If Elpida cannot provide that same level of quality, Apple will be the one taking the customer satisfaction hit.
 
Good for Apple..and us

If this rumor is true, it's a smart move by Apple. Like a previous poster said, diversifying your supply chain makes good business sense. Using multiple suppliers for critical components provides you better leverage during component pricing negotiations...but doing this also hedges against capacity and delivery risks. This may be a bad example since Elpida is in Japan, but if a natural disaster were to affect Samsung or Hynix production sites, Apple could still source DRAM from Elpida.

Though I'm not privileged to know exactly why Apple is doing this, I highly doubt Apple is working with Elpida to "screw over" Samsung due to litigation between both parties. If recent news of Apple and Samsung possibly reaching a settlement over IP infringement is any indication, I doubt Apple is using Elpida to "punish" Samsung. Just my 2cents though.

Regardless, I hope this translates to cheaper Apple products (or improved Apple products held at existing prices).
 
Apple is Samsung's one of the biggest clients and its arch rival. I'm sure Samsung saw this coming and prepared themselves accordingly. It was about time.
 
rjohnstone said:
Apple will be back.
How many times have they gone to other vendors only to come back to Samsung.
Let's face it, Samsung makes some of the finest semiconductor components in the industry.
Apple has always been about delivering a quality finished product.
This means using quality components.
If Elpida cannot provide that same level of quality, Apple will be the one taking the customer satisfaction hit.
Click to expand...

And screen components! A lot of Samsung's equipment is second to none. It's a pity the relationship between them and Apple has become so sour.
 
JohnDoe98 said:
And if the rumors turns out to be false, the market will correct itself, so again what's the point?
Click to expand...

I guess my point is that someone forgot to tell the stock market that Digitimes' rumours have less truth in them that politician's election promises.

And that it doesn't take much to swing a cheeky 10bin either way on a big company.
 
The bipolar market is hilarious! :D Makes you wonder about the idiots who are in charge of your portfolio if they can be affected by Digitimes.
 
it is just Tim Cook at work to further refine the whole Apple Supply chain to ensure that they always has enough chip for production.
 
Skoopman said:
Define "OK". Elpida isn't even listed on the Tokio Stock Exchange anymore... This rumor is really fishy.
Click to expand...

Could be that Elpida gave Apple a good deal in order to get the huge investment they need to keep running.

Apple gets the production volume they need at a good price. Elpida gets to stay alive. Samsung gets shafted.
 
rjohnstone said:
Let's face it, Samsung makes some of the finest semiconductor components in the industry.
Click to expand...

Let’s face it, they are no better or worse than those made by others.

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mertyz said:
Apple is Samsung's one of the biggest clients and its arch rival. I'm sure Samsung saw this coming and prepared themselves accordingly. It was about time.
Click to expand...

Really? How do you prepare for this?
 
rjohnstone said:
To call it a "hit" is sensationalism at its finest.
It's called business as usual.
Hell, Apple takes bigger hits every other day.

Where's the big story about how Apple's market cap has dropped nearly $80B in the last 4 weeks?
The reality... nobody cares. This is how the stock market operates.
Click to expand...

However, this is in response to specific news and is greater than the broader market drop from the situation in Europe. Apple's stock has pulled back after a meteoric rise the previous 6 months. That kind of thing happens all the time.

As for the story, it doesn't surprise me in one bit. Apple doesn't want to be too reliant upon any single supplier. That's how it keeps its leverage.
 
Just took delivery of a 27" iMac that shipped with 4GB of Elipda ram.
Then subsequently replaced it with 16GB from OWC which is now shipping Hynix ram.
 
Hakone said:
Diversifying the supply chain; cheaper cost or just taking it to Samsung?
Click to expand...

Probably both... This is a pretty clear warning to samsung. At the same time, by keeping more competitors in the market, apple forces them all to compete with one another, and allowing all 3 to submit bids for an order of chips from apple will basically get apple a low price. :)
 
I know they've only done this for bargaining but it's nice to see Apple inject cash in to this company and potentially save a lot of jobs. If Crucial does end up buying it at-least they won't need to lay people off.
 
10 bil is nothing for Samsung. And Apple cap just took a 50 billion "hit", so what?

Do you really think Apple would risk making a deal with a bankrupt company?

In any case, Samsung will have no problem selling all the memory they make, or selling anything they make for that matter.
 
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saturn88 said:
10 bil is nothing for Samsung. And Apple cap just took a 50 billion "hit", so what?

Do you really think Apple would risk making a deal with a bankrupt company?

In any case, Samsung will have no problem selling all the memory they make, or selling anything they make for that matter.
Click to expand...

Apple is getting bigger and bigger sellling more devices every quarter. You might want to recalculate more often.

This is now, what about 24 months, 36 months later? Steady drop hollows a stone isn't that what they say?
 
If this is true, then solid move by Micron and Apple which will have me investing n Micron as I already have positions in Apple.

----------
saturn88 said:
10 bil is nothing for Samsung. And Apple cap just took a 50 billion "hit", so what?

Do you really think Apple would risk making a deal with a bankrupt company?

In any case, Samsung will have no problem selling all the memory they make, or selling anything they make for that matter.
Click to expand...

Apple moving away from Samsung in DRAM would definitely be well over a few or more Billion in revenues lost to their bottom line and that $10 Billion in valuation will go up.
 
rjohnstone said:
To call it a "hit" is sensationalism at its finest.
It's called business as usual.
Hell, Apple takes bigger hits every other day.

Where's the big story about how Apple's market cap has dropped nearly $80B in the last 4 weeks?
The reality... nobody cares. This is how the stock market operates.
Click to expand...

Exactly.

As of right now, Apple stock is taking a 7 billion dollar hit today. BFD.

The real reason the markets around the world are tanking is Greece. Specifically, Greece, Portugal, Spain, and Ireland. Of course, that would be lost on most Americans... ;)
 
mdriftmeyer said:
Apple moving away from Samsung in DRAM would definitely be well over a few or more Billion in revenues lost to their bottom line
Click to expand...
I don't think it will be lost revenue for Samsung. There will be other buyers and they will buy at even higher prices. Quality DRAM is in very high demand. The demand will almost double next year and everything will be sold anyway. No small DRAM company could meet this unsustainable demand.

marketview_20100304B.gif


Apple needs Samsung more then Samsung Apple. Samsung is developing new technologies and manufacturing real quality components. Apple can't manufacture any mobile components nor even assemble them. Apple is about style and marketing. They could not even design a working antena for the iPhone 4.
 
About a month ago two of Apple's largest stockholders commented on AAPL price targets by several "analysts". Their position is it would see 500 before it sees 700, but nobody inherently objected to a $1000 price target in a full year from now. Currently we are seeing sell in May and go away. If you are thinking of buying AAPL stock, look in June or put a buy order in between 425, the last gap point, and 485 which is near the top of the prior long term channel.

As of when I type this it is around $545. I think the peak was around $645.

Rocketman
 
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Rocketman said:
About a month ago two of Apple's largest stockholders commented on AAPL price targets by several "analysts". Their position is it would see 500 before it sees 700, but nobody inherently objected to a $1000 price target in a full year from now. Currently we are seeing sell in May and go away. If you are thinking of buying AAPL stock, look in June or put a buy order in between 425, the last gap point, and 485 which is near the top of the prior long term channel.

As of when I type this it is around $545. I think the peak was around $645.

Rocketman
Click to expand...
$425? Retracing to 50% off its highs is uncharacteristic for AAPL stock. I believe we are near the bottom and I will not go much lower then $525. So stating to buy now is a pretty good bet. Otherwise one day we will wake up in the morning with $30 gap up. Quarterly chart:

big.chart
 
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