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iPhones, iPods to Hog Flash Chip Market

The recognition of flash memory-based merchandise, notably the iPhone and iPod music gamers, is sending waves by the marketplace for the kind of reminiscence chips they use, and that’s main , a Taipei-based spot marketplace for reminiscence chips, to mission a spike in costs over the subsequent three months as pre-holiday manufacturing ramps up.

iPhones, iPods to Hog Flash Chip Market

Particularly, the iPhone and iPod will devour 25 p.c of the market’s capability for NAND Flash chips within the third quarter, Dramexchange projected.

The market is unprepared for the demand as a result of snags in world manufacturing have resulted in lower-than-expected output.

Spot Shortages

“It can take roughly two to three quarters earlier than producers can elevate their yield charges to the next degree. DRAMeXchange holds the view {that a} Flash chip scarcity will happen in 3Q07. Coupled by the truth that many downstream distributors are starting to fill up on stock forward of the Christmas gross sales, an inadequate provide needs to be seen in 3Q07,” Dramexchange says in its report. Flash costs are projected to proceed rising because of this, it concluded.

Such a scarcity is certainly conceivable — particularly if rumors of a less expensive iPhone truly materialize, Adrienne Downey, a analysis advisor with advised MacNewsWorld. “It’s fully doable, in that state of affairs, that Apple might take that a lot capability,” she stated.

Nevertheless, Downey disagrees with Dramexchange’s provide projections. “There’s fairly a little bit of capability developing within the second half of the 12 months,” she stated. Within the best-case state of affairs, she concluded, the market can count on to see spot pricing spikes and shortages, notably within the third quarter.

Some Disagreement

The projections could also be a bit excessive, stated Jim Helpful, a principal with .

“When Apple launched the nano, it used 20 p.c of the whole NAND market,” he advised MacNewsWorld. “I do not know what number of iPhones Apple is making, however I perceive it’s within the neighborhood of three million.”

That may be a good quantity for an introductory product, he stated, however it’s nothing in contrast to the 15 million nanos that promote.

Spot shortages and worth spikes are set to happen, Helpful additionally believes.

Perpetual Watch

The NAND market has been on perpetual watch ever since Apple’s iPod product line turned so well-liked. Analysts and competing producers have been monitoring the market all that extra intently for the reason that plans for the iPhone had been introduced. Projections range, however the consensus is that offer will probably be tight for the remainder of the 12 months and costs larger than regular.

A lot will depend on what Apple will do: rumors {that a} smaller iPhone will probably be launched persist. There are different merchandise within the works as properly that would gobble capability.

Not solely may Apple develop its use of NAND flash reminiscence in its iPods and Macintosh PCs, however there are additionally indications that Apple might launch a small, “subnotebook” laptop that makes use of NAND flash for its predominant storage, American Know-how Analysis analyst Shaw Wu predicted.

Producers are ramping up manufacturing in response to the rising demand.

forecasts the NAND market will develop 3 p.c to US$12 billion in 2007, a 3 p.c lower in contrast to its earlier forecast in February 2007. The NAND market will return to a standard progress sample in 2008, it additionally predicted.

In the long run, IDC forecasts NAND income to attain $19.7 billion in 2011 at a 13 p.c compound annual progress fee from 2007 to 2011.

Rubber Ball Pricing

IDC additionally tasks a 43 p.c bit worth erosion throughout the identical interval, pushed primarily by high-density merchandise.

Certainly, NAND market pricing tends to be very unstable, which is why most analysts are sanguine concerning the doable worth spikes this 12 months.

“Income progress was spectacular for a number of years, however as extra producers enter the market, costs fall to profit-erasing ranges,” Downey wrote in a current report. “Shortages have a tendency to seem when a big new utility hits the market and consumes all of the out there NAND in sight.”
iPhones, iPods to Hog Flash Chip Market

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