Report: Apple manipulating NAND flash pricing

Apple is manipulating NAND flash memory pricing though “questionable” purchasing strategies, according to a new report. Citing multiple unnamed industry officials, The Korea Times reports that Apple is using the leveraging power provided by the popularity of the iPhone and flash-based iPods to order more chips from semiconductor makers than it actually needs. “Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market,” said an unnamed senior industry official. “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.” A separate unnamed official called Apple’s purchasing strategies “absurd,” adding, “Samsung and Hynix both provide chips to Apple and have less of an edge in deciding prices and volume. Apple’s strategy could hurt the industry’s health.” An earlier report from September indicated that Apple’s consumption of NAND flash chips, which are used in the iPhone and iPod nano, touch, and shuffle, was causing a severe shortage of the popular components.

  1. “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 table 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 iLounge.

  2. Apple: “We want x number of functioning Chips at this price”
    Chip Manufacturers: “Here you are: x number of Chips”
    Apple: “Only half of these are functioning, the rest are defective.”
    Chip Manufacturers: “Help! We’re being repressed!”

  3. Who knows whether this is true or not, but… Wow… blatant fanboy’ism… my god… Its frightening how people will follow a company through anything…

  4. @ Gregory,

    Yeah, we should all stop using Apple products because of an unsubstantiated rumor.
    You Windows fanboys are the real humor – especially when you come to sites that seem to have a higher % of Mac users.
    I guess the big MS Store openings weren’t enough to keep your ADD from coming back…

  5. It’s not a question of fanboyism or anything else with the above quotes, it’s one of reading comprehension. Neither sb nor Dennis came remotely close to summing up what was claimed or provided anything close to a reasonable alternative.

    The claim is that Apple is telling the manufacturers they would like to buy X units of memory. Once it’s actually ready for delivery they’re reneging, saying they were mistaken to order X, they only need X/2. This leaves the manufacturer with what amounts to a huge glut of chips which drives the cost down, once the price drops due the artifical glut *created* by Apple, Apple comes back and says they changed their mind, they’d like to buy the other X/2 units. This lets Apple buy their full allotment of units at substantially lower cost than they initially negotiated.

    Now, is Apple actually doing this, I don’t know, but your two’s “explanations” were idiotic and fine examples of people who will go far out of your way to explain away something negative about one more amoral corporation with a great PR dept.

  6. @ Code Monkey… I’m not sure if you’re referring to me or to sb, but I don’t recall providing any ‘explanations’ idiotic or not. My point isn’t that this did or did not happen (and I’m actually not an MS fanboy) it is that the majority of people here seem to dismiss it as easily as I am accepting it.

  7. OK, so what’s worse – accepting it NOT KNOWING the details or NOT?
    As for Code Monkey – you’re kidding, right?
    You’ve read the contracts?
    You’ve read the complaint?
    Not likely on either count.
    You’re like the US Congress (part of it) pushing a health care bill none have read.

  8. @ sb… I can’t disagree with you there; it’s just as ignorant to wholeheartedly accept it as truth as it is to dismiss it completely. I guess we won’t know the truth for a while, if ever. I simply felt that the first three comments were way too dismissive considering the gravity of the accusation.

    However, I also think that Code Monkey made some valid points.

Leave a Reply

Your email address will not be published. Required fields are marked *