SK Hynix Semiconductor will be supplying Samsung Electronics with memory chips as early as June, industry sources said on Monday. The firm will supply enough to make up 20 percent of Samsung’s mobile business.

The deal would mark the first time for SK Hynix to supply Samsung, and also would be a partnership to note as a deal between the world’s largest memory chipmakers, No. 1 Samsung and No. 2 SK Hynix.

There already had been reports that Samsung wanted to diversify its mobile chip sources by leaning on SK Hynix, instead of fulfilling all demands internally as it is doing currently.

Samsung Electronics’ mobile business chief, Shin Jong-kyun, had said last week that Samsung would ask SK Hynix to supply mobile DRAM (dynamic random access memory) chips and NAND memory.

Sources said that the supply orders have already been issued to SK Hynix, with the latter in full gear to fulfill them.

The biggest factor behind the partnership is Samsung’s inability to meet its own mobile demand, despite spending billions of dollars on its memory chip lines.

The recent launch of the Galaxy S4, coupled with the anticipated roll-out of the Galaxy Note 3 in the latter half of the year, will undoubtedly lead to a supply crunch ― which Samsung hopes to avoid with the mobile DRAM chips manufactured by SK Hynix.

Seasonal reasons also are responsible for the supply of the mobile DRAM chips, since the third quarter is traditionally when demand goes up, according to industry data.

Data from Display Analytics showed last week that Samsung Electronics, as of the first quarter of this year, grabbed more than one-third of the global smartphone market share after shipping a record amount of handsets.

SK Hynix has so far chosen to remain mum on the issue. The chipmaker’s chief executive Park Sung-wook recently told reporters that he was not in a position to comment about what was being supplied to its clients.

The deal is particularly sensitive since it would give Apple, currently one of SK Hynix’s largest clients, another push to raise its prices, since it has so far been stringing along suppliers at cheap prices.

Suppliers so far were reticent to criticize Apple’s price policies, since supplying to one of the world’s most valuable companies had held significant meaning in itself. 


By Kim Ji-hyun
(jemmie@heraldcorp.com)