Friday, April 19, 2013

Samsung's huge expectations for GS4 sales reflected as company looks to acquire additional DRAM

If you are wondering what Samsung's expectations for Galaxy S4 sales are, the answer is: huge. J.K. Shin, head of Samsung's mobile business, said on Thursday that the company is considering purchasing mobile memory chips from rival SK Hynix.

The significance of that shouldn't be lost on those who are aware that Samsung produces its own RAM. In fact, Samsung is the world's largest manufacturer of DRAM chips. It has -- until now -- largely depended on internal supplies of memory chips for its Galaxy range of smartphones, but prices of mobile DRAM chips have risen steadily since early this year, with supply expectations tightening.

The Galaxy S4 is slated to go on sale later this month. It is expected to outsell Samsung's prior S models. Some analysts believe the phone could outsell the iPhone 5, Apple's current flagship phone, enabling Samsung to capture the top spot in global smartphone sales, which the iPhone 5 captured in the fourth quarter of last year.

The expectations for Samsung's new flagship phone have to make Google happy. Samsung is the top Android OEM, but others such as HTC, Motorola and LG sell decent quantities of phones, as well (the upcoming HTC One is expected to be a good seller), and those manufacturers, along with Samsung, mean that Android is the top smartphone platform globally, though not in the U.S.

A deal with Samsung would be a boon for SK Hynix. The company currently counts Apple as one of its top DRAM chip customers, but 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.

Apple stock, too, has been hammered ahead of an April 23 earnings release for its fiscal Q2 2013.

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