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Wed, 18 Jul 2007 Apple takes 25% global flash supply

Analysts warn of flash memory shortage as Apple stockpiles for iPod, iPhone

Jonny Evans

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Apple has secured 25 per cent of global flash memory production in its drive to meet demand for its iPhone and iPod devices driving flash memory prices to rise, claim analysts atDRAMeXchange.

Apple's move to secure huge quantities of the memory have twinned with unexpected production snags in the migration to more advanced flash memory manufacturing processes. This has led to lower-than-expected output.

DRAMeXchange warns that flash memory prices will continue to climb in response to these effects, continuing a trend seen in recent months.

They also warn that a flash memory shortage will emerge in the third quarter 2007, and that it will take several quarters before manufacturers raise yield rates.

The move to new production processes hasn't been a smooth one, the analysts note. Flash memory makers have started to produce chips based on even thinner circuitry. However, the new technology isn't fully mature, so production capacity is not matching manufacturer's original projections.

As a huge portion of the existing capacity is being allocated to Apple, "many downstream vendors have been unable to secure enough flash chips," the analysts said.

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