Samsung, Hynix whine about Apple’s Flash buying tactics
With Apple it’s easier to list the products that aren’t built around or include a Flash storage option than it is to name all of the ones that do. Moreover, the Mac, iPod and iPhone maker is one of the few tech companies still growing like it’s 1999, giving them perhaps a little more leverage than its partners are used to (wah!).
Have you ever seen a big, muscly guy whimper and whine in public? As a guy, watching such a display is disturbing (and embarrassing) in ways that are hard to explain.
That said, Korea Times (KT) tells the sad, sad tale of Samsung and Hynix, two of three the companies that own the Flash market (the other is Intel), and how Apple is kicking them around willy nilly in pursuit of the lowest possible price.
“Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market,” a senior industry official told the KT on the condition of anonymity.
What does that mean, you might ask? Well, the Korea Times summarizes it thusly― Apple is contributing to the suppression in flash memory prices by ordering more chips from semiconductor makers than the amount it actually buys from them.
“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,” continued KT’s source. “The company doesn’t make immediate purchases, but waits until chip prices to fall to the level the company has internally targeted.”
Want some cheese with that whine?
You know, Apple’s dealing with multiple partners and fluctuating, seasonal demand that’s also driven by new product releases, so about the best they can do is guesstimate what they think they’ll need—a very tricky business. Likewise, the Flash suppliers are also in the business of forecasting and creating production capacity to meet demand that they believe or at least hope will be there to buy the supply.
Thereupon, Samsung and Hynix have excess capacity. Apple has one of the few product portfolios that’s still growing volume in the midst of a worldwide recession.
That kind of math sounds pretty straight forward to me…
What’s your take?
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