Through an acquisition, Samsung would strengthen it’s channel for supplying it’s flash chip to retail and channel sales of end-user flash memory. With weak chip prices and fluctuating buyer habits, a move like this could strengthen Samsung’s position and would put Samsung at over 50% of world wide control of production, distribution and sales of NAND flash memory.
Avi Cohen of Avian Securities said it was an “unlikely prospect” due to SanDisk being unwilling to sell at the bottom of the cycle, and Samsung becoming a direct competitor to many of its customers and regulatory concerns. “Regulators in the US, Korea and Europe among others will likely have issue with one player controlling north of 50 per cent of NAND [Flash memory] supply,” he said.Another option is Samsung reducing it’s royalty license to SanDisk to gain synergy with the top seller, reduce SanDisk’s bottom line and secure channel distribution of flash memory.
However if a deal goes ahead, it could block efforts by Samsung rivals Toshiba and Hynix Semiconductor to topple Samsung’s market leadership. Toshiba runs joint production lines with SanDisk and Hynix is also conducting joint re-search with the US group. Samsung controls 42.3 per cent of the NAND flash memory market, trailed by Toshiba with 27.5 per cent and Hynix with 13.4 per cent, says market researcher iSuppli.Source:Â Financial Times. Continue Reading