Samsung Electronics held talks with Apple Computer earlier this year about a possible joint-investment in flash memory chip production but the talks failed to go anywhere, a spokeswoman for Samsung said on Monday.
Apple uses flash memory in its iPod Shuffle and in its recently launched iPod nano portable music players. Samsung is the world's biggest supplier of flash memory and a major supplier to Apple.
A deal between the two companies over Samsung's supply of flash memory for the iPod nano has sparked controversy in South Korea, after competitors voiced concerns that Samsung won the business by offering to sell the chips to Apple at below market price.
The chairman of South Korea's Fair Trade Commission said in a radio interview about 10 days ago that an investigation into the deal was possible, according to several local media reports.
On Monday, the Korea Times newspaper said those comments gave Apple cold-feet about any joint investment plans and scuppered any chance of that deal coming to fruition.
"Basically, it was just preliminary discussions that took place early this year," Sung In Cho, a spokeswoman for Samsung in Seoul, told IDG News service Monday. "They didn't proceed beyond preliminary stages of discussion."
She would not reveal any other details of the talks.
The newspaper put the size of the potential joint-investment at about 4 trillion won (AU$5.2 billion).
Apple could not be reached for comment early Monday.