Nand Flash memory demand rockets

Nand Flash memory chips are in short supply due to the growing popularity of portable devices such as digital cameras and MP3 players, according to Samsung.

The chips differ from earlier memory chips because data on them can be easily erased and replaced, and they store data after the power has been switched off.

Seen by some as mini-hard discs without moving parts, the latest Nand chips can store 2Gb of data.

Research firm iSuppi sais that the market for Nand is growing at an annual rate of 32 per cent, with worldwide sales predicted to reach $15.4bn next year from $10.8bn this year.

Samsung has 50 per cent market share followed by Toshiba with 22.8 per cent and Hynix Semiconductor with 13.2 per cent.

Intel looks likely to grab a significant share of the market through a joint venture with Micron Technology, a move it has made in the light of Apple's shift to Nand in September with the roll-out of the flash-based iPod Nano.

Apple secured a deal with Samsung for flash memory for the Nano that allows it to buy as much as 40 per cent of Samsung's Nand output in the second half of this year, something that Apple's competitors claim will create a Nand shortage.

Apple is also diversifying its sources of Nand chips. It announced a combined $1.25bn in deals to secure Flash memory from Samsung, Hynix, Toshiba and IM Flash Technologies, the new joint venture between Intel and Micron.

Makers of Nand chips are so optimistic that Hwang Chang-Gyu, president of Samsung Electronics' semiconductor business, has even claimed that Nand chips will eventually replace hard discs, perhaps leading to far more lightweight portable devices. "Shortages will create a 'Flash rush'," he said earlier this year.

Nand stands for Not AND, relating to the logic gates used by the chips.