Samsung cutting no slack for flash customers?
updated 03:25 pm EDT, Tue August 28, 2007
No Samsung Flash Price Cut
Samsung has allegedly refused to slash prices on flash memory for its largest customers in the wake of the major power outage that disrupted supplies, say sources within Samsung. While others had suspected that the Korean chipmaker would deliberately cut prices for some of its favorite customers to compensate them for lost profit as supplies fall short, company insiders stress that their firm wants a level playing field and has kept prices consistent whenever possible, according to the report. Pricing for short-term orders from Samsung is known to have spiked immediately after the outage to compensate for the manufacturer's own losses, but was not expected to have touched contract prices.
Nevertheless, the company's apparent refusal to apply discounts may create problems for Apple and other third parties that are expected to depend more heavily on Samsung's flash memory stocks for handheld devices. While immediate prices for batches of 8-gigabit chips have dipped since the outage from $9.02 to $8.38, contract prices have remained steady at $9.50. This potentially eats into the ability for designers to offer cellphones and media players with large amounts of flash without increasing prices.
Manufacturing costs at Samsung's rivals, such as Hynix and Toshiba, was not revealed in the most recent update but is known to have spiked temporarily when news spread of the Samsung accident.
Several companies are known to be producing flash players with 16GB of memory but may be increasing prices to follow suit, with Creative's upcoming ZEN costing $300 -- a full $100 more than the 8GB version. Apple typically avoids releasing pricing until an official launch but typically compares closely to Creative when both products are equally new.
