Apple Could Cause Flash Memory Price Hike

By consuming an amazing 25 percent of the manufacturers' flash memory output, Apple may trigger a shortage and corresponding price increases.

As if we needed further proof of Apple’s dominance in the market for portable media players, a report from analyst DRAMexchange shows that the California company is gobbling up 25 percent of the entire world’s flash memory supply in the making of its iPhone and iPod portable media players.

Combined with a problematic new flash manufacturing techniques that has pared back supply, DRAMexchange expects that Apple’s ravenous consumption of Flash memory may drive prices skyward in the third quarter. Prices have already risen four to seven percent in the last three months due to the new manufacturing process, which has companies attempting to make even thinner chips.

The result of both factors coming together in the third quarter may be a flash memory shortage. Besides driving up prices, a shortage could also keep smaller manufacturers from getting their hands on the memory they need. DRAMexchange expects a possible shortage would last two or three quarters while manufacturers works the kinks out of the new technologies and increase their yields.