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Fri, 27 Apr 2007 Apple hunts flash memory for iPod, iPhone

Apple is attempting to secure huge orders for flash memory components for iPods and iPhones

Jonny Evans

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iPods prices may stop falling as Apple addresses climbing flash memory prices, reports imply.

Grappling with a likely shortage in flash memory supplies, Apple is currently discussing a high volume purchase of the component with Samsung, a report claims.

According to DigiTimes, the two firms have been in talks in South Korea in order to arrange a large purchase of flash memory chips, for use in "all iPods and iPhones from June to year-end 2007," the report explains.

Apple is reportedly attempting to secure 400-500 million 4GB flash memory chips from the company – that's 10-15 per cent more than the order already booked between the two companies, the report explains.

The world's largest manufacturer of flash memory chips, Samsung apparently is not completely certain it will be able to meet Apple's flash memory demands, and is also concerned that any decline in iPod sales, or disappointment in iPhone sales, could lead to an oversupply of flash memory in future, impacting unit prices.

Apple is engaged in similar discussions with Hynix Semiconductor, the report explains.

Apple released its financial results this week, confirming a dramatic increase in gross margins on the basis of falling component prices, including of flash memory.

However, Apple also warned that margins will likely shrink in the current quarter as a result of climbing flash memory prices. Hynix Semiconductor recently warned that it expects flash memory prices to climb 20 per cent in the current quarter.

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