Where Will Apple Get Flash Memory Now? 245
An anonymous reader writes "EE Times examines whether Samsung could be about to control the equipment output of Apple by putting the Cupertino company on a rationed supply of NAND flash as the non-volatile memory goes into short supply in 2013. The analysis argues that Apple may need to put down billions of dollars of cash to fund a guaranteed NAND flash supply plan, something that Samsung did in the middle of the last decade."
they bought Anobit but.... (Score:3, Informative)
Re:Anobit? (Score:5, Informative)
Because Wikipedia: "Anobit Technologies, Ltd. is an Israeli fabless designer of flash memory controllers." For the reading impaired, this means that they design memory controllers, not memory chips, and they only design them, they don't make them.
Re: Non story (Score:0, Informative)
Re: Non story (Score:5, Informative)
Well the story assumes that Apple hasn't already secured their supply. This story from 2005 [macworld.com] reports how Apple made 5-year deals with 5 different manufacturers to secure their supply. The deals have since run out but it doesn't take a grand strategist to guess that Apple may have negotiated new deals. Remember Apple is very secretive so that may not announced to the world all their plans. Also, Apple has been known to front money to their suppliers in exchange for guaranteed supplies. Today they are sitting on billions in cash.
Please rtf the original article. The deal with 5 different manufacturers is why Apple will find it difficult to source the supply in 2013. They schemed the manufacturers and always projected they needed way more than they purchased. This lead to oversupply in the market and lower prices. So the 5 year, 5 manufacturer deal fell off the cliff. Therefore Apple in 2013 will have to put up billions as opposed to 1.25 billion and they probably have to buy all of the nand they think they need. Not just project and then play one manufacturer against another. Therefore Apple will possibly pre-pay and possibly pre-pay much higher prices and will also need to buy it. They will probably not make as much money on the NAND but still a significant margin.
And the parent post is modded informative! The best of slashdot. This post needs to be modded down into negative territory.
Re: Non story (Score:5, Informative)
Back in 2005 Apple pre-paid $1.25 billion to five NAND flash memory suppliers to ensure they would be able to supply Apple with memory through 2010. That was a five-year supply agreement (see Apple to pre-pay $1.25 billion for flash memory) that made sure Apple could continue its apparently inexorable rise as a mobile consumer electronics supplier. The five NAND flash memory suppliers were the same as those listed above although how the pre-payment broke down was not revealed at the time.
Apple also then proceeded to give its suppliers an indication of its estimated future needs year-by-year so that the vendors could tailor their manufacturing to meet its needs. The only problem was that towards the end of the five-year agreement Apple was reportedly accused of always over-estimating the need causing the flash memory vendors to be always in an oversupply situation and unable to raise prices. These accusations circulated in South Korea during 2009 (see Apple accused of NAND price manipulation).
Re:Wow... Talk about pulling a story out of thin a (Score:4, Informative)
...all in the midst of a glut in capacity in the semiconductor industry.
Re:I hate the term FUD (Score:5, Informative)
No, its not probably the start of the term; it goes back, in that specific form, at least to IBM's tactics against competitors in the 1970s.
Re:this is why Apple has a huge cash stash (Score:3, Informative)
Unfortunately a fab is not a household appliance that you can have installed by next Tuesday. These things take time to plan and build and need to operate for a while before they crank out working chips. If Apple needs flash memory next year, this year is a little late to start planning.
Re: Non story (Score:5, Informative)
This only become a better situation for memory manufacturers with iPhone and iPod with demand for 16 and 32 GB memory sizes. Who else was buying at that size? Even the Zune never got more solid state storage than 16GB. And look a the iPad, now pushing 128 GB, while the WIndows Surface RT was released with 16GB and 32GB. The point is that if the manufacturers wanted to sell memory, Apple was the firm that was mass marketing large quantities to consumers.
What really changed in 2010 was Android, and the smartphone market share approaching 10%. It is interesting to note at that time RIM still had the largest market share, and would grow in revenue for another year. It is also interesting that most phones only has 1GB or none at all. Android phones, OTOH, like iPhone, built a demand of lots of memory. The smartphone was going to grow, and it was going to require lots of nand flash. Apple, for the first time had real competition for memory.
Here is where the manufacturers have to be careful. While tablets are going to drive memory demand, phones may not. I bought the 64(57available)GB iPhone and now realize that there is no way I am going to use all of it. With permanent cloud storage for purchased content and streaming I do not need it. An android phone I bought last year had almost no storage. It does not need it. All content is streamed. So right now we are in a bubble. People still want memory, but how long are they going to pay for memory they do not need? And if other do what MS is doing, which is selling tablet with insufficient memory, how is that going to effect the market?
Re:"the typical man-hour myth" (Score:4, Informative)
I wager that no matter what resources I muster, getting a functioning baby, from scratch (so to speak), is going to take me no less than 36 weeks, and that's shorting the process by a couple figuring you can induce early (i.e.: the base moulding won't be applied and some of the paint won't be finished).
I've watched some "fast track" architectural projects (I'm a structural engineer in real life), and one of two things happen: The project ends up taking just as long as it would have, or it becomes an absolute clusterfuck where nothing works properly. Occasionally, you get both the regular schedule AND the clusterfuck. On very rare occasions, and on very small projects, good planning actually saves time - but it's still never as much as the owner would like.
Re:this is why Apple has a huge cash stash (Score:5, Informative)
If you have Apple's pile of cash, getting a fab is pretty damn easy. You just hire people who know exactly what they are doing. If you scramble, you can have blueprints and permits done in a month, all the POs and contracts can be signed by next month, and you can break the ground and go ahead. All it takes is focused people who know exactly what it takes in their discipline -- architects, process engineers, building site managers, etc.
Seriously?? LOL...
I used to work for a company that builds the robots/machines required for fabs. It would take 6 to 12 months just to spin up extra capacity in an existing fab. Most fabs took at least 2 years to build, from planning to production. In addition, it then takes another year or so to improve chip yields to get the plant at maximum efficiency. And this is working with major chip manufacturers with experienced personnel already on their payroll and with huge budgets. For Apple to build a fab, it would take them much longer as they would be literally starting from scratch with hiring fab managers, etc.