Sparking Debate Within Industry
Friday March 30, 7:00 pm ET
James Detar
Flash memory chips will be scarce items in the second half of 2007. That will drive flash prices sky high. Higher prices will hurt everyone from Apple to small chip firms that supply the flash card market.
Or not.
Analysts and executives in the industry are debating whether there indeed will be a flash shortage. A shortage could have ramifications since flash is in such popular products as Apple's (NasdaqGS:AAPL - News) iPod music player.
It's true that after a long period of sliding prices, flash prices have started to rise. In a Tuesday report, research firm DRAMeXchange says Nand-flash prices rose from 4% to 7% the prior week.
It says it was the second weekly price jump in March, and it blames a shortage of flash chips.
The report has generated some fears, but not from everyone.
"The story of a flash shortage is a little overblown," said W.R. Hambrecht analyst Daniel Amir. "Samsung has been having difficulty" keeping up with market demand for Nand-flash chips, Amir said. "But we think Samsung's competitors will pick up some of that business."
Samsung is the No. 1 maker of the type of flash memory chip called Nand. Nor is the other type, but Nand is the most popular. Micron Technology (NYSE:MU - News), Hynix and Toshiba also are makers of flash chips.
Device makers prize flash. Unlike DRAM, or dynamic random access memory, the main memory in PCs, flash chips retain data even after a user turns the device off.
Micron says it's ready to take up any of Samsung's slack.
"Regardless of what the market is doing short term, we believe Nand is the right place to be," said Brian Shirley, vice president of memory at Micron. "We've closed the gap on process and product technology and we're in high volume."
Analysts say Samsung may be having trouble getting its new chip production process up to speed. They also say the rollout of some new flash-using digital devices, including Apple's iPhone, is causing a spike in sales.
Nand flash goes into flash cards, or tiny circuit boards, used in cell phones, MP3 music players and other consumer devices. PC makers also are adding flash to their computers to enable functions like instant-on. |
