Yesterday’s $10 billion wipe-off from Samsung’s market value could have been based on unfounded fears. Samsung’s share price dropped by 6.2 percent, the largest single-day drop in four years, after a DigiTimes report about Apple placing a huge mobile DRAM order with struggling Japanese manufacturer Elpida, buying off more than half of its production capacity. The report was judged as unfavorable to Samsung, which is the world’s largest DRAM manufacturer and has Apple as one of its biggest clients. However, it turns out that Elpida was already selling more than half of its production capacity to Apple.
According to a Reuters report, which cites two sources and an analyst, Elpida was already supplying 40-60 percent of its DRAM production to Apple. “(There’s) nothing new in our view given Elpida usually assigns about 40-60 percent of its mobile DRAM capacity for Apple according to our channel checks,” Merrill Lynch analyst Simon Woo told the wire service.
In other words, the original DigiTimes story was actually no-news, which is usually the case with most of what the Taiwanese news sites reports.
Strangely enough, Samsung’s stock shed another two percent of its market value in early morning trade. Probably investors are worried that Apple might look at alternatives to Samsung, which is one of its biggest component supplier for most products, if the patent lawsuits between the two companies are not resolved. Apple is also one of Samsung’s biggest clients for its semiconductor business and is the world’s largest consumer of semiconductor chips according to a Gartner report.