HONG KONG (Dow Jones)–The popularity of Apple Inc.’s (AAPL) new iPad and iphone is spurring rival computer and smartphone makers to launch similar products to stay competitive, helping to drive up demand for key components such as memory chips.
Chip makers and analysts say demand for flash memory chips, used to store data in tablet PCs, mobile handsets and other consumer electronics, remains strong leading up to the busy second half of the year, while supplies remain tight. These favorable market conditions should enable chip prices to remain stable for the next few months, helping to boost earnings at flash memory chip makers including Samsung Electronics Co. (005930.SE), Toshiba Corp. (6502.TO), Micron Technology Inc. (MU) and Hynix Semiconductor Inc. (000660.SE).
“Given the low level of capital expenditure made by NAND flash makers last year, we foresee some limitation in the increase of overall supply of NAND chips this year,” Keisuke Ohmori, a spokesman at Japan’s Toshiba, the world’s second largest maker of NAND flash memory chips by revenue after Samsung, says.
Ohmori said supply in the NAND flash market is expected to be tighter in the second half of this year.
Since its launch in April in the U.S., Apple has sold about 3 million iPads. And Apple’s newest version of its iPhone, the iPhone 4, is also shaping up to be a blockbuster — the company took preorders for more than 600,000 of the devices on its first day of availability, while carrier AT&T Inc. (T) had to stop taking advance orders because of inventory issues and stronger-than-expected demand.
“The success of the iPhone in the smart-phone category has spurred the launch of a series of competitive mobile phones. Beyond the smart-phone segment, a number of other promising products are driving the NAND market this year including e-books and tablet PCs,” says Michael Yang, an analyst at market research firm iSuppli Corp.
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