Hold the chips: Apple axes Samsung RAM order for iPhone 5

Apple has cut down its order of memory chips from Samsung, reducing its reliance on its smartphone rival for components, say supply chain sources cited by Reuters.

The iPhone 5, widely expected to be announced next week, will feature fewer Samsung components than its predecessors, say the sources.

The newswire speculated that the move could be a signal that Apple is looking to diversify its supply chain or pull back its dealings with arch smartphone-rivals.

Samsung manufactures the A5 and A5X processors at the heart of the iPhone 4S and iPads 2 and 3, but the RAM layer in the chip package will no longer be from Samsung, and the NAND flash memory used in iPad, iPhone and iPod will be from elsewhere too.

Instead Apple has increased orders of DRAM chips and NAND flash memory from SK Hynix, Toshiba and Elpida Memory – which are all existing contractors.

We already knew that the new iPhone 5 will feature fewer Samsung components, with the screen manufactured by Sharp and LG for the first time, but this means that the memory will come from elsewhere too. Samsung is still expected to make the main processor for the phone.

Samsung is the biggest manufacturer of memory chips in the world - recently investing £4bn in its chip-making plant in Austin, Texas, where the A5 chips are made.

It will be a welcome move for Toshiba at least. In July, the world's second biggest NAND chip-maker announced a 30 per cut in flash memory chip production, pinned at the time on market oversupply and declining prices.

In April this year, Apple reported that it was committed to £11bn in parts and component expenditure. ®