Samsung Electronics may purchase mobile memory chips from South Korean rival SK Hynix for devices including the Galaxy S, said J.K. Shin, head of Samsung’s mobile business. If the deal goes through, it will be a boon for SK Hynix, which currently counts Apple as one of its top DRAM chip customers and saw it shares slip 2.8 percent on Thursday after another Apple chip supplier, Cirrus Logic, warned of a reduced product forecast from one of its customers.
Though Cirrus Logic did not name the customer, the company is seen as a key indicator of demand for iPhones and iPads because at least 90 percent of its business comes from Apple.
Samsung is itself the world’s biggest maker of DRAM chips and has counted on its own internal supply of memory chips for Galaxy series smartphones, but chips are in increasing demand, with price rising and supplies dwindling as more mobile device makers prepare to upgrade their flagship products by boosting memory storage capability.
Turning to SK Hynix means that Samsung can avoid supply disruptions for its Galaxy S4 smartphone, which is set the launch this month. Its predecessor, the Galaxy S3, ran into supply chain problems shortly after its launch, but in that case the components in question were parts like handset casings, not chips.
Ensuring that there are enough Galaxy S4 handsets to meet consumer demand is vital if Samsung wants to meet the upbeat sales forecast for the phone, which is seen as the main challenger to Apple’s iPhone. Jefferies analyst Peter Misek has written that Samsung plans to build 100 million Galaxy S4 units, and that the component and manufacturing needs for the Korean tech giant’s flagship smartphone may take resources away from the iPhone.