Samsung, Hynix Confirm Chip Supply Deal With Apple Until 2010

Samsung Electronics and Hynix Semiconductor confirmed Tuesday that they have entered into long-term agreements with Apple Computer Inc. to supply NAND flash memory chips used in Apple's iPod Nano and other music players, digital cameras, storage gadgets and handhelds.

The agreements will run through 2010, the South Korean companies said in separate disclosures to the Financial Supervisory Service.

On Monday, Cupertino, California-based Apple said it plans to prepay a total of US$1.25 billion (Ђ1.07 million) for flash memory components during the next three months.

Also Monday, Intel and Micron Technology agreed to form a joint venture, IM Flash Technologies LLC , to produce flash memory for consumer electronics and said the new company has a US$500 million (Ђ423 million) deal to supply chips to Apple.

Japan's Toshiba Corp. also secured an agreement with Apple.

Samsung Electronics Co. said last month that talks with Apple on a possible joint investment to produce flash memory chips had broken down.

On Tuesday, Samsung said it will receive an initial payment of US$500 million (Ђ426 million) from Apple, while Hynix Semiconductor Inc. said it will receive an initial payment of US$250 million (Ђ213 million) within three months.

Samsung and Hynix didn't provide further details of their agreements with Apple in their statements. Last week, the companies disclosed that they were in talks with Apple to supply memory chips after the Korea Exchange requested additional information, AP reported. V.A.