Thailand is the second largest producer of hard-disk drive (HDD) in the world next to China. But the recent flood in Thailand has hit the production of HDD, affecting manyleading companies. Samsung is one of them, which has been affected greatly by the flood. The late supply of HDD from Thailand has been affecting the PC business of Samsung, since there is a reduced demand for dynamic random access memory (DRAM) following the delay.
Samsung is the top producer of DRAM used in PCs and it competes with other manufacturers such as Hynix, Micron, and Elpida.
Samsung President, Jun Dong-soo said, “There is too much uncertainty in the DRAM market. A disruption in PC production will have a direct impact on DRAM demand. Maybe will get worse”
The flood is hitting hard on Samsung DRAM division resulting in a very less demand, and the price has started going down by 50 per cent in the third quarter alone. Other DRAM producers are also facing quarterly losses.
However, the delay has also benefited Samsung, as the technology giant is seeing an increase in the demand for solid-state drive (SSD). The SSDs are currently used only in some computers such as Apple MacBook Air. ”It is true that we are seeing more orders, albeit not many, for SSD after the flood,” said Dong-soo.
But since SSD comes with high price, Samsung is not sure whether this increase in demand will last for long or not. Dong- soo said, “It will take time that the SSD penetration rate will become a double-digit (from the current 3 to 4 per cent).” He is also concerned that legal battles between Samsung and Apple can weaken its partnership with other important customers.
Apple uses memory chips and application processors supplied by Samsung in its iPads and iPhones. Dong-soo was confident that Samsung can compete on the chips division saying, “We don’t care about the legal row. We will leave Apple no choice but to use our components. It has no impact.”
Samsung Electronics Chief Operating Officer, Jae-yong told reporters last month that he had discussed with Tim Cook about supplying components to Apple till 2014 at Steve Jobs' memorial service.