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Apple flash memory orders for new iPhone hurt supply

updated 10:45 pm EST, Tue February 17, 2009

iPhone flash memory orders

Apple's preparations for the next-generation iPhone line is constraining worldwide supplies for leading flash memory manufacturers and may increase prices. A new analyst report says that Apple's (unannounced) refresh of iPhones is putting increased pressure on flash memory manufacturers managing dwindling inventory. According to Cult of Mac, ThinkEquity analyst Vijay Rakesh is telling clients that Apple has begun placing orders for memory for a yet unannounced upgrade to the current iPhone 3G and the rumored "iPhone Nano" or a similar device. Most recently RBC analyst Mark Abramsky claimed that a $99 iPhone would appear later this summer, but that the device would not be a rumored iPhone nano, but instead a pared-down regular iPhone.

The new ThinkEquity analyst report indicates that the component purchases leading up to the manufacture of the next-generation iPhone(s) have begun to put strain on supplies from major flash memory, such as Samsung, Hynix, Toshiba. In particular, long-time partner Samsung has allocated its inventory until April.

"Our checks indicate that Apple has started ordering for its iPhone refresh (iPhone and iPhone Nano), stifling the supply chain," ThinkEquity analyst Rakesh told clients in a note obtained by Cult of Mac.

According to the note, three out of Apple's four memory suppliers are constrained and with limited availability from Samsung due to Apple's increased needs, Hynix and Toshiba are facing even greater pressure to meet Apple's memory supply demands.

Rakesh also notes that Toshiba, which recently cut NAND production by 30 percent, is having supply problems when it comes to 56nm flash NAND and that Hynix had experienced significant sales slowdown in the fourth calendar quarter of 2008. However the report noted that Micron, the fourth Apple memory supplier, was not mentioned in the analyst report as experiencing similar supply questions. Micron last week was the first to ship 16GB NAND flash memory using the smaller 34nm flash (but is not the largest, as it is dwarfed by physically larger 32GB chips that should be in production from Toshiba and Intel).

While NAND flash prices dropped last year because Apple placed limited orders, the new iPhone ramp by Apple has caused a supply problem, forcing flash memory prices upward, the analyst concluded.



By Electronista Staff
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Comments

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    +2

    no super-cheap iphone

    i'm surprised that these "analysts" are certain apple is going to release a dumbed-down version of the iphone. executives explicitly said this isn't a market they want to be involved with, at least not in the near future.

    And couldn't this other device be the ipod touch? Last time i checked, those things sell in pretty large quantities and use similar (if not the exact same) flash memory. could that not be the second product apple needs the memory for?

  1. freudling

    Banned

    Joined: Mar 2005

    +1

    Dumbed...

    What I have started doing is "dumbing" myself down while reading these pervasive, baseless comments from analysts. Why do I still read them? Guess what? There is no iPhone Nano! There never was one. Apple is simply ordering flash memory, but trust the "analysts" to make logical leaps that Apple is releasing something other than an updated iPhone.

    Hey, check this out... I just read that Apple has placed an order with SanDisk for 128 GB SSDs. Therefore, they must be getting ready to release a Tablet Computer! Yaaaah for analysts!

  1. Peter Bonte

    Fresh-Faced Recruit

    Joined: Aug 2001

    0

    Yaaaah

    I want. :(

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    +1

    I don't believe this

    iPhones are selling well but their requirement for flash cannot be that big a proportion of Worldwide demand - the analysts are hyping things up.

  1. Constable Odo

    Fresh-Faced Recruit

    Joined: Aug 2007

    +1

    It sounds like hype to me

    but maybe that's because Apple is asking for a large quantity in such a short time-frame. I realize that Apple is one of the few handset manufacturers to build such a large amount of memory into each smartphone. Most of the newer handsets use only a small amount of onboard memory and supplement it with microSD cards. If the memory companies had more time to feed Apple's demand then there wouldn't be a problem. I guess this year we'll see a 64GB iPod Touch.

  1. jfelbab

    Fresh-Faced Recruit

    Joined: Jan 2004

    +3

    What if

    What if Apple is planning to use FLASH chips to make their computers instant on devices?

    What if Apple plans on introducing a digital camera?

    What if Analysts had to work for a living?

  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    +2

    Sorry

    I just bought all the broccoli at walmart. It's MY fault for buying it. I shouldn't have bought the amount I needed.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: What if

    Instant on? You mean more so than they are now?

    And why would Apple need memory for a digital camera? Apple tried digital cameras. It failed miserably (OK, so it was 43 years ago, that's not the point!).

    And you don't need large capacity chips for digital cameras. Unless Apple plans on taking over the camera market by making the first high-priced digital camera with no SD slot.

    Wait, that does sound like Apple....

    Comment buried. Show
  1. Guest

    Fresh-Faced Recruit

    Joined: Nov 1999

    -10

    Again & again...

    Fck Apple! Fck them for their evil empire!

    Support a Linux distro or any TRUE open-source project. And I mean hardware and software in open-format!

  1. loudpedal

    Forum Regular

    Joined: Oct 1999

    +2

    What?

    With this world economy, I can't believe I'm hearing someone complain that Apple is buying too much memory!

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