Apple demand eats global flash memory supplies, creates shortages

Apple is generating a major shortage of flash memory as it ramps up its product plans for Christmas.

A report this morning claims Taiwan’s flash memory makers – including Samsung, Micron, Toshiba and Hynix – are prioritising orders for Apple and warning of shortages across the rest of the market.

These moves emerge scant days since Apple introduced its new range of iPods, including the new high-capacity 64GB iPod touch (currently lacking a camera), new iPod nanos and more.

The action also occurs as industry rumours speculate Apple may proffer a new bunch of product upgrades in the month ahead, with many still anticipating release of a media-focused Apple tablet.

In July, Apple confirmed a half-billion dollar deal with Toshiba for supply of flash memory chips. Apple chief operating officer, Tim Cook, stressed the importance of the deal, saying, “We view flash as a very important component for us, because we use it in so many of our products.”  He noted that Apple uses 3% of the world’s flash storage.

Apple’s securing a chunk of the flash memory market has also helped prices in that market recover slightly following months of weakness.

In the contract market, average pricing for 16Gb chips climbed 7.2% to US$4.48 in the first half of September, and 32Gb went up 4.3% to US$6.80.

The question: With Apple clearly generating such demand for flash memory components, does the company plan to introduce new flash memory products within the next quarter, or is it simply ramping up supplies for the Chinese iPhone launch later this year?