BEIJING, Oct. 18 -- Talks between Samsung Electronics Co. Ltd.and Apple Computers Inc.over a $3.8 billion joint venture to produce NAND flash memory chips have failed, a Samsung spokeswoman said on Monday.

    "Talks didn't proceed beyond the preliminary stages,"said Sungin Cho, "We're not commenting on the reason that talks didn't develop.'

    According to the South Korea Times, Apple pulled out because South Korea's Fair Trade Commission may investigate the company for what the commission says is an unfair deal between the two companies. The Korean government said Samsung supplies 2-gigabyte and 4-gigabyte Flash memory chips to Apple at half their market value.

    Samsung and Apple had planned an investment partnership in which the companies would have set up a NAND flash memory line in South Korea to supply Apple's line of iPod audio players.

    Samsung is the world's largest maker of NAND flash memory, used in hot-selling MP3 music players, digital cameras and high-end mobile phones.

    Analysts said Apple had booked as much as 40 percent of the NAND output of Samsung for the second half of 2005 to support production of its flash memory-based iPods digital music players.

    The Korean Economic Daily said that Apple is now holding talks with another, as-yet-unnamed company with regard to investing in flash production in the US.

    (Agencies)