Apple, new tech trigger flash oversupply?

A combination of Apple's seasonal sales and new manufacturing process are instigating a crisis in NAND flash memory, claim memory makers. As Apple typically ramps down its requests for the memory to reflect cooling demand after the holidays, the company has left the associated chipmakers with excess stock that will force them to drop prices to clear warehouses: immediate prices for 8-gigabit (2GB) and 16-gigabit (4GB) multi-level flash chips have dropped by as much as 25 percent in the second half of this month, the report says. Additionally, more densely-packed 50-nanometer flash memory has begun mass production at the same time, increasing the amount of overall memory on the market.

Apple is likely to have exacerbated the supply this issue through increased demand for flash memory versus last year, having added both the iPhone and iPod touch to its demands for NAND storage while also shifting the iPod nano to increased amounts of flash storage. The company is the only of its kind believed to have escaped a sales drop during the holiday shopping season and so will have put greater pressure on its contractors than other jukebox designers.

The use of solid-state drives for impending ultraportables and other notebooks may help soak up some of the extra stock but is not expected to have a dramatic effect as most SSDs are still too expensive for the average user, the memory makers predict.

The overall situation may clear by January but may cause a reverse crisis as companies that have cleared out their excess storage need to ramp up production once again.

Filed under: iPod, iPhone, industry, Apple