OEMs faced with high prices as supply shrinks.

Samsung and Hynix, two of the largest global Flash memory manufacturers, are having trouble producing enough Nand chips to meet demand, according to recent reports. 

Taiwan-based news outlet DigiTimes cited sources within the manufacturing industry allleging that the two Korean firms are having trouble fulfilling orders from OEMs. 

Apple was given much of the credit for the shortage, as the company is believed to be hoarding large volumes of the chips which are used in the iPhone and two iPod models. 

US-based spokespersons for Samsung could not be reached to comment on the report.

Nam Hyung-Kim, director and principal analyst at research firm iSuppli, was unable to verify the reported shortage, but noted that manufacturing growth from both companies has slowed in the second quarter of this year. 

"The real issue is being driven by supply, not demand," he told vnunet.com.

Kim explained that chipmakers scaled back production in the second quarter in an effort to push prices back up after seeing dips early in the year.

While the chipmakers benefit most from the short supply and high prices, Kim said that he does not expect larger manufacturers to have any trouble obtaining enough Flash chips.

It is the smaller OEMs that will suffer most from the short supplies and high prices, according to Kim. The analyst expects supplies to climb by August and to steady prices.

Copyright © 2009 vnunet.com