The Korea Times (via MacRumors) is reporting that there are a number of complaints accumulating regarding Apple’s handling of the Flash Memory market. Apple, who is a major consumer of NAND Flash memory chips for things like iPods, is being accused of manipulating the market prices.
The summary of the arguments goes as this — 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.
Ok, here’s what Apple is being accused of doing. Ordering a certain amount of flash memory from a manufacturer, which forces the memory prices down due to oversupply, then following the price drop, Apple purchases a lesser number of units than originally ordered.
“Apple should certainly be blamed for deteriorating the supply and demand cycle in the global NAND flash market,” a senior industry official told The Korea Times, refusing to be named.
“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.”
I’m now law scholar, but I don’t think Apple is doing anything illegal. That said, if these accusations are true, this could hurt their relations with NAND flash memory manufacturers. As MacRumors ably points out, this may just be a short term strategy to drop prices in Apple’s own products, which is currently facing steady competition from the likes of Google’s Android.
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