Samsung shares reach new high on talks with Sony to sell flash chips

12/26/05 - newratings.com

LONDON, December 26 (newratings.com) - The world's largest memory-chip maker Samsung Electronics Co Ltd (SSUN) Monday said that it may sell NAND flash memory chips to Japanese electronics company Sony Corp (SON1).

The Suwon, South Korea-based company said in a statement to the Korea Exchange that it is contemplating signing supply contracts for NAND flash chips with major companies, including Sony. Samsung Electronics added, however, that it is yet to reach concrete deals. Korea Economic Daily quoted a senior official at Samsung as saying that Sony had asked the semiconductor maker to supply NAND flash chips for its new MP3 players to be launched next year and the contract between the two companies is likely to be signed in the first half of 2006. The company has, however, not confirmed the report.

The report of a potential deal between Samsung and Sony comes only a month after the Korean company announced that it had won orders worth $500 million to supply NAND flash memory chips to Apple Computer Inc (APPL), the world's largest maker of MP3 players, through 2010. Although global demand for NAND chips is growing rapidly, Samsung is facing stiff competition from its Japanese and US rivals.

Samsung Electronics’ share price rose 1.4%, or 9,000 won, to close at a new high of 654,000 won on Monday.