Rising Smartphone Demands Could Lead To Shortage Of Memory Chips

According to Eli Harari, CEO, SanDisk Corp, robust consumer demand for smartphones could lead to a shortage of memory chips in the second half of this year. He also stated that decline in memory chip prices will remain benign and at a rate that is slower than his projected 30-40 percent decline in costs.

“On the smartphone, there has been a dramatic increase in sales and the only way to store content is on flash memory and that has driven up demand,” Harari. “Smartphones will be the new PC basically. (They) are computers in disguise,” said Harari. “We basically sell the ammunition. There is a war going on and we sell the bullets.”

Last month, research firm, Strategy Analytics, said the smartphone market grew 30 percent year-on-year in the December quarter to 53 million phones. “The demand-supply balance which has been very healthy, I would say in the last 3 to 4 quarters, we would expect it to continue to be healthy- very healthy- for the rest of this year and into next year,” Harari said.