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NAND Flash Shortage

Shortage of Samsung NAND flash limits Taiwan availability of Apple's 4GB iPod nano

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Jimmy Hsu, Taipei; Esther Lam, DigiTimes.com [Monday 16 January 2006]

Taiwan distributors are facing a shortage of the 4GB version of the iPod nano as Apple strategically pushes the 2GB version amid Samsung Electronics' tight high-density NAND flash supply. The 2GB version currently sells for NT$6,500-6,900 (around US$200), while the 4GB version is around NT$8,500 (a little over US$250); obviously the latter uses double the amount of memory at a price that is just over 25% higher.

Apple Taiwan commented that its stock is allocated from its US head office and it has no knowledge of any strategic supply preference for the 2GB iPod nano over the 4GB version.

Taiwan distributors said that, despite stiff competition for stocks and strong demand for the 4GB iPod nano, orders are being limited to two to three hundred units. This shortage has persisted for two to three months and the distributors do not expect it to be resolved in the near term. High growth in demand is exasperating the problem: global sales of iPod rose to 14 million units in the fourth quarter of 2005, up over 210% from 4.5 million in the same period of 2004.

Although Samsung has said that its NAND flash output more than doubled in 2005, it predicted last week that there would be a global NAND flash supply shortage from the second quarter of 2006.

In order to catch up with demand, Samsung plans to boost monthly output at its Line 14, which is the fab dedicated to NAND flash production, to 60,000-70,000 12-inch equivalent wafers by year-end 2006, up from 2005's 30,000.

The chip giant also plans to gear up its process development. Samsung plans to migrate half of its NAND flash production to its 70nm node this year, up from 26% last year.

http://www.digitimes.com/bits_chips/a20060116A5026.html