SEOUL (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.
Apple is Samsung’s biggestcustomer, buying chips and displays from the South Koreancompany and accounting for 7.6 percent of its revenue, accordingto data compiled by Bloomberg.
The mobile DRAM (dynamic random access memory) business is “the only thing worth buying” among Elpida’s assets, says Amir Anvarzadeh, a manager for Asian equity sales at BGC Partners.
It cited unnamed industry sources in its report, which hit shares of major chip suppliers to Apple.
Hynix shares jumped 3.3 percent to 28,150 won at the closeof trading in Seoul, the biggest gain since April 13, while thebenchmark Kospi index fell 0.3 percent.
Samsung, the world’s biggest DRAM maker, tumbled 6.2 percent to a 9 week low of 1.23 million won ($1,100) – the stock’s biggest daily fall in nearly four years.
“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,” said Choi Do yeon, an analyst at LIG Investment & Securities.
TPG Capital also plans to make a bid, says a person familiar with the matter, as may Micron Technology (MU), according to a report in Japan’s Nikkei business daily.
While potential suitors ranging from South Korean and Japanese tech companies to US private equity firm TPG Capital aren’t much interested in Elpida’s workforce or even most of its chip product, they do covet Elpida’s unit that makes chips for Apple’s (AAPL) iPad and iPhone.
Samsung declined to comment, as did the Japanese court appointed trustee handling Elpida’s rehabilitation.
A spokeswoman for SK hynix said: “We are receiving more orders for mobile DRAM chips from our customers.
Toshiba held initialtalks with SK Hynix about a joint bid but has decided not toproceed, Reuters reported April 23.
” She declined to comment on whether Apple had reduced orders from the firm.Technology shares were also impacted by a broader sell off after talks to form a new Greek government failed, stoking concerns the country may exit the euro zone and increase financial market uncertainty. Shares in flat screen maker LG Display slid 4.5 percent. Hyundai Motor lost 4 percent..”Samsung shares were already facing pressure since offshore investors began cutting back on risk during the latest streak of sell offs, but the news surrounding Elpida was the straw that broke the camel’s back,” said Rhoo Yong suk, an analyst at Hyundai Securities. “It was just unfortunate timing that coincided with jitters surrounding Greece.
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