Apple's long shadow over the flash-memory market might help it avoid serious problems in the wake of Samsung's production outage.
The second half of the year was already shaping up to be tight, as flash-memory companies switch over to new manufacturing technologies. But, of all things, a power outage in South Korea Friday could really make things difficult for companies that are depending on flash memory chips from Samsung this holiday season.
Analysts estimated that 15 percent of Samsung's output in the third quarter could have been lost because of the power outage. Not only will Samsung have to stop production for a couple of days, but some flash-memory chips that were in the manufacturing process could be ruined by failing to go through all the steps. Chipmaking and baking have more in common than you might think, and if the power goes out in the kitchen for several hours, that pie is not necessarily going to recover.
But Apple, unlike the rest of the industry, might have an easier time this fall getting all the flash-memory chips it needs for iPods and the iPhone.
Apple won't directly comment on its relationship with Samsung or other flash-memory vendors, but it's thought that Apple gets favorable supply terms because of its heft in the music player market. DRAMeXchange, a Taiwan analyst firm, estimated that Apple consumes 25 percent of the world's supply of NAND flash memory, and Samsung supplies about 44 percent of the world's NAND flash.
The outage might delay Apple's plans for future flash-based devices, such as a new iPhone, a new touch-screen iPod or a flash-based ultraportable notebook. If Samsung is able to get back up and running by Saturday, its stated goal, then the disruption shouldn't be too bad as other suppliers step in to fill the void, iSuppli said in a research note Friday. But an extended outage could hurt everyone.