According to a number of industry insiders, the possibility of NAND prices increasing is very real. The leading flash memory-producing companies are thinking of hiking prices because of the strong demand for flash memory technology. In light of the increased demand, a 10 to 15% increase in NAND chip prices is expected to occur by the middle of November.
Some of the companies considering the price hike are Toshiba, Samsung, SanDisk, and SK Hynix. These four companies also happen to be the top 4 flash chip suppliers in the world. What is driving these companies to increase NAND prices? Simply put, smartphones. The burgeoning smartphone sector is the major reason for the high demand for NAND flash. It only makes sense, since today’s smartphones are highly dependent on flash memory technology to function seamlessly.
This dependence is now catching up to the leading producers of flash. Hearsay of a price hike comes at a time when most of the NAND-producing companies are already up to their necks with flash chip orders. Companies have been ordering nonstop to deliver more units to consumers eager to get their hands on smartphones. Apple has already monopolized flash chip-sets from SanDisk and SK Hynix that will eventually go into the production of more iPhone 5 units and the anticipated iPad mini. Microsoft, in a similar vein, has commissioned chips for its Windows Phone 8 devices. The demand is expected to rise even more with pre-orders for smartphones going through the roof.
Since the leading NAND flash companies are already in full production (and mostly probably handling some backorders), there may only be a small supply of flash chips to go around. Following that line of thinking, flash-producing companies may increase NAND prices as a way of slowing the demand for it even just a bit. This slight decrease of demand may just be what the companies need to be able to recover from demand and keep up with production. It’s yet to be known whether the possible increase in NAND will mean an increase in the price of smartphones. There is hope, though, that the price hike will be absorbed into the current price of smartphone models.