Intel has confirmed that it will push up the price of flash memory chips by as much as 40 per cent at the beginning of next year.
The chip maker told vnunet.com that the increase is a result of greater demand, particularly in the mobile phone market.
Flash memory is used to store information on devices such as mobiles and handheld computers.
An Intel spokesman said: "It is true that we will be putting up the price of flash memory chips in all market segments by up to 40 per cent in January.
"There has been strong demand and growth in flash products, and analysts have predicted that 440 million mobile phone handsets will have shipped to the channel this year."
Gartner analyst Andrew Norwood confirmed that there has been an improvement in the flash market, and warned that similar announcements about price hikes should be expected in the near future from other manufacturers such as AMD and Fujitsu Siemens.
"If Intel is able to raise prices then the others are able to do the same," he said.
But the analyst suggested that the price increases could turn out to be much less than 40 per cent.
"Up to 40 per cent could mean as little as one per cent. When you want to raise prices you give a higher ballpark," he explained.
"There is an underlying improvement in the flash market and this is good news for the semiconductor market. It is due in part to the mobile phone market.
"Last year's production of mobile phones was dire, but this year we have seen a rolling recovery. We are seeing more flash content, and an increase in functionality means more and more flash memory in mobiles."
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