Apple cuts memory chip order to Samsung for new iPhone

SEOUL - Apple Inc has reduced its orders for memory chips for its new iPhone from key supplier and competitor Samsung Electronics Co, a source with direct knowledge of the matter said on Friday.

South Korea's Samsung is a core Apple supplier, producing micro processors, flat screens and memory chips -- both dynamic random access memory (DRAM) chips and NAND memory chips -- for popular Apple gadgets such as the iPhone, iPad and iPod.

Apple has been cutting its orders from Samsung as it tries to diversify its lines of supply for memory chips, although the South Korean firm remains on the list of initial suppliers for the new iPhone, the source told Reuters. The person declined to be named because the negotiations are confidential.

The Korea Economic Daily, citing an unnamed industry source, reported on Friday that Apple had dropped Samsung from the list of memory chip suppliers for the first batch of the new iPhone, whose release is widely expected to be announced on September 12.

The report said Apple instead picked Japan's Toshiba Corp, Elpida Memory and Korea's SK Hynix to supply DRAM and NAND chips.

"Samsung is still in the list of initial memory chip suppliers (for new iPhones). But Apple orders have been trending down and Samsung is making up for the reduced order from others, notably Samsung's handset business," the Reuters source said.