Big chip makers such as #Samsung Electronics Co. Ltd. and #MicronTechnology Inc. are raking in record revenue thanks to a global shortage of flash memory. According to a new report on the market from #DRAMeXchange, the memory and storage division of #TrendForceCorp., the long-running shortage of #memorychips is set to continue in a trend whose flip side is a hit to profits of many companies making products as wide-ranging as #smartphones, #computers, #networking gear and #flashstorage arrays. DRAMeXchange said in its latest analysis of the market that NAND flash memory component sales totaled $16.5 billion in the second quarter of this year. That represents a 73 percent year-over-year jump. The previous record for quarterly revenues was set in the first quarter of this year, when NAND Flash memory makers raked in around $14.1 billion in revenues. The profit growth is being driven by an acute global shortage of NAND flash memory, which has come about as memory makers prioritize the production of higher-density 3D NAND chips, CRN.com reported. The shortage has led to flash prices skyrocketing, and has had a major impact on the bottom lines of a number of big technology companies that use NAND Flash as the primary storage medium for hardware such as servers and smartphones, among other things. In the latest quarter, NAND flash component prices for PC and server components rose by about 10 percent, while component prices for mobile devices increased by 5 percent. One of the companies most affected by these rising costs is Super Micro Computer Inc., which recently reported earnings that came up short of analysts’ expectations, resulting in a 10 percent drop in its share price. Super Micro said the blame for its disappointing results could be placed on the rapidly rising cost of flash memory chips. Another company that’s suffering due to the high costs of flash is Cisco Systems Inc. On Wednesday the networking giant reported a 4 percent decline in revenues, which was also partly blamed on the rising cost of Flash. Unfortunately for these companies, things are unlikely to improve in the near term, as DRAMeXchange predicts that NAND Flash component prices will continue rising throughout the year. It said that this was thanks to tight supply resulting from the lack of major fab expansion plans and yield issues with leading-edge processes. “The DRAM market benefited from the upswing in ASPs and continuing progress in suppliers’ technology migrations,” said Avril Wu, research manager of DRAMeXchange. “At the same time, suppliers do not appear to have plans to expand their production capacities in a significant scale between now and the end of the year.” That is, of course, good news for the suppliers themselves, whose operating margins are likely to continue rising. The analyst firm said Samsung was the leading supplier with $7.6 billion in revenues and a 46 percent share of the market, followed by fellow South Korean firm SK Hynix Inc. at $4.5 billion, or 27 percent, and U.S.-based Micron Technology Inc. at $3.6 billion, or 22 percent.
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