Apple manipulating flash memory market prices, report claims

Jonny Evans
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November 30, 2009
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Apple is being accused of employing its bulk purchasing position to manipulate flash memory prices in Korea today.

An article in the Korea Times cites industry sources, principally chipmakers, who seem to be frustrated because Apple will place a large order for the component but then subsequently buy less than originally demanded, generating market saturation and suppressing prices.

The article notes Apple’s high profits in recent months, comparing these to the lean margins currently experienced by South Korean chipmakers such as Samsung and Hynix.

"Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market," The Korea Times quotes an un-named industry official as saying.

iSuppli predict flash memory in mobile phones shipped worldwide will reach c.5.8GB per handset in 2013, up from less than 1GB in 2008.

Samsung, Hynix and Apple Korea declined comment on the Korea Times report.

Comments (4)

9to5Mac Noob (not verified) | November 30, 2009 - 4:34am

What's the percentage of the total market of flash memory Apple buys - I have a figure of 3% but aren't sure that's at all right.

You'd imagine that chipmakers and others, would make a decent enough contract, so that the order placed for a component has a financial bakcing. If they buy lessthan legally agreed, so be it. But if it's just different to what was "demanded" or discussed, i'd imagine that's different. Market saturation? Supressing prices? The article needs to show this.

Tom (not verified) | November 30, 2009 - 4:43am

Money quote:

"Apple has asked Korean semiconductor makers to produce a certain amount of chips for its digital products, only to actually purchase a smaller volume eventually. The company doesn't make immediate purchases, but waits until chip prices to fall to the level the company has internally targeted."

This is Dragon's Den 101 - a discussion on a deal is not the same thing as a purchase order


9to5Mac Noob (not verified) | November 30, 2009 - 10:55am

Get purchase agreements in writing with penalties for non-purchase. A smile, handshake, and a slap on the back only work with folks that can be trusted to keep their word.

9to5Mac Noob (not verified) | November 30, 2009 - 5:11pm

“Unnamed sources” claim Apple is buying “more than they need”
Hmmm.  How do they know what Apple needs?
Haven’t the rumors and other info pointed to a tablet?
If so, said tablet isn’t going to be using hard drives for crying out loud.
Seems someone’s not happy with having to do business with a company based on the theories of “free market”
This is what we’re going to get with the “one world economy” certain politicians and others want.
No thanks.
If Apple are doing wrong - prove it.
Name names, and give facts.  This is BS at this point.
*Note - this applies to the “story” not 9 to 5 Mac.