Flash Chips Are Getting Scarcer

Two of the largest Flash manufacturers in the world, Samsung and Hynix, are having trouble producing enough NAND chips to meet demand, says vnunet.com. The Taiwan based Internet news outlet, Digitimes, cited sources from within the two major companies, and the conclusion is that the two Korean manufacturers are having trouble fulfilling already placed orders from system integrators.

Chief Executive Officer Kim Jong Kap said in an interview given to the Bloomberg news site that: "We have some inadequacies and we need to work to plug in those holes." "We're slightly behind our competitors but it's not a big problem." But be declined to provide details.

Most think that the American company Apple is to blame for the current shortage, as it is said that Apple is hoarding huge numbers of NAND chips for the production of iPhone and two new iPod models. Director and analyst for the iSuppli company, Nam Hyung-Kim, said that it is impossible to verify this rumor, but mentioned that manufacturing increase from both Samsung and Hynix slowed down in the second half of this year. "The real issue is being driven by supply, not demand", he told vnunt.com.

He also explained that chip producers scaled back manufacturing capabilities a few months ago in an effort to push prices back up, after a steady decline over the first months of the year. With a short supply of NAND chips and a high demand, prices are rising rapidly and producers benefit most from it. Kim also said that NAND supply will slowly rise until the entire demand will be met, but even now large and established computer and electronic manufacturers are not having any trouble obtaining enough Flash chips.

Smaller system integrators and computer manufacturers will still have a hard time getting enough Flash chips, even more so since the price is quite high. The analysts expect to see prices lowering a little and NAND chips supplies rising by August.