Apple overbooks flash memory for iPod?
updated 03:05 pm EST, Wed February 22, 2006
Weak NAND memory market
A slowdown in demand for NAND flash memory--the kind used in Apple's latest iPods--will have a "significant negative impact on pricing" for DRAM, according to market research firm iSuppli. A lull in the market for NAND flash memory, while typical after the holiday season, has led to an oversupply situation in the market this quarter. Even with Apple cutting prices and announcing new iPod products, NAND suppliers have yet to see a benefit, as Apple and other major buyers reportedly overbooked NAND flash in case of short supply. This has led to a swelling of NAND part inventories, leading to a rise in NAND flash availability and a downfall in prices as major NAND buyers look to reduce their inventories.
Nam Hyung Kim, director and prinicipal analyst for iSuppli, says "we don't believe that the current glut represents a fundamental, long-term worsening in market conditions."
The firm said that the DRAM market rebounding well, recovering since January--a stark contrast to the weak NAND market. iSuppli said that DRAM suppliers have been successful in raising OEM contract prices during the first half of this month and are expected to increase prices again in the second half.
Apple last November prepaid $1.25 billion to secure flash memory through 2010 from Hynix, Intel, Micron, Samsung Electronics and Toshiba, following reports that Apple had turned to Hynix to help supply flash-memory for its low-end iPod shuffles.
Samsung, which was rumored to be making a megadeal with Apple for flash memory, is being investigated by the South Korean government for allegedly selling NAND flash memory chips to Apple at half their market value, but continues to invest heavily in flash-memory with plans to invest $615.4 million to build a new memory-chip production facility to meet rising demand for NAND flash memory, while both Intel and Micron have joined forces to ramp production of flash memory for consumer electronics.
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Editing
In contrast to NAND, the DRAM market is experiencing improved conditions and has been in a state of recovery since January. [b]DRAM suppliers successfully raised OEM contract prices during the first half of this month and are expected to increase prices again in the second half.[/b] Despite this, iSuppli believes that the DRAM market has become overheated.
The firm said that the DRAM market rebounding well, recovering since January--a stark contrast to the weak NAND market. [b] iSuppli said that DRAM suppliers have been successful in raising OEM contract prices during the first half of this month and are expected to increase prices again in the second half.[/b]
WTF with the redundancy here?
>>Apple last November year prepaid $1.25 billion to secure
November year?