Apple is one of the largest consumers of NAND flash modules for its iPhone and iPod lineup and the company is known for causing NAND flash memory shortage in past. Digitimes is reporting that NAND flash supply has reportedly become tighter as major chip produces Samsung, Toshiba, Micron and Hynix Semiconductor favor demand for Apple devices.

“Demand for NAND flash across all applications, especially smartphone, will recover in line with a better economy in 2010,” said DRAMeXchange. “The demand bit growth from the year is forecast to jump 81 percent on year to 10,986 million units. However, chip producers are still conservative about capacity expansions.”

DRAMeXchange expects the supply bit growth for 2010 will rise 79 percent on year to 10,759 million units, a relatively slower growth compared to the demand side. The supply to demand ratio has been falling since second quarter this year. It was negative 1.3 percent in Q3 and it will drop further to negative 3.3 percent in Q4.

This drop in supply to demand ratio is resulting in 7-8 percent and 8-14 percent rise in contract prices for mainstream 16Gb and 32Gb MLC NAND flash chips respectively.  The contract price for 64Gb chips also saw a rise of 6-13 percent in Q3 2009.