SK Hynix Semiconductor, the world’s No. 2 chipmaker, will not supply mobile dynamic random access memory chips to Samsung Electronics, mostly due to a supply incapacity from the smaller player.
“The June plans seem to have fallen through because SK Hynix’s supplies can’t meet Samsung’s demands,” said one industry watcher on Wednesday, speaking anonymously.
He added that margins also played a role, noting that there was no reason for the smaller chipmaker to try and sell mobile DRAM chips when PC DRAM was showing a much better margin.
SK Hynix mobile DRAM
The prices for PC DRAM chips saw a surge in the first quarter, rising by more than 90 percent compared to November last year, according to figures from DRAM Exchange ― and the upward trend is expected to continue.
At the same time, the increasing competition between smart devices is expected to fan a decline in the mobile DRAM and NAND prices for these devices, according to a report from Kiwoom Securities.
These factors have come together to force SK Hynix to turn away from Samsung, industry watchers and those close to the matter said.
Earlier, market experts had predicted that SK Hynix was poised to help meet Samsung Electronics’ growing memory demand, enough to make up for to 20 percent of Samsung’s mobile business, industry sources said.
The supply from SK Hynix was expected to start as early as June, with Samsung’s supply lines stretched thin and unable to meet its mobile demand, despite spending billions of dollars on its memory chip lines.
The recent launch of the Galaxy S4, coupled with the anticipated rollout of the Galaxy Note 3 in the latter half of the year will undoubtedly lead to a supply crunch.
Seasonal factors are also responsible for the supply of the mobile DRAM chips, since the third quarter is traditionally when demand goes up, according to industry data.
By Kim Ji-hyun (email@example.com