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Apple to use 25 percent of the world's flash memory

Flash memory companies will be scrambling to fill orders the rest of this year with 25 percent of NAND capacity allocated to Apple, according to a market research firm.

Flash memory chips bound for Apple's iPods and iPhones will account for 25 percent of the world's total flash output in the third quarter.

So says DRAMeXchange, a market research company out of Taiwan that tracks the memory industry. It's referring to a specific kind of flash memory known as NAND, which is the flash technology of choice for modern cell phones and MP3 players. Flash memory can store data without an electrical charge and without any moving parts, which makes it ideal for mobile devices and increasingly for notebook PCs.

In the third quarter, flash memory companies will send 25 percent of their chips to Apple for products like the iPod Nano. CNET Networks

Apple's share of the MP3 player market means it gets to cut deals with flash makers, notably Samsung, to secure all the chips it thinks it will need for a given point in the future. This isn't good news for everybody else, as they have to fight for the remaining scraps. And there might not be enough chips to go around in the third quarter, DRAMeXchange said.

That's because flash makers are making the transition to a new, thinner manufacturing process. And that's always an engineering challenge that can affect yields, or the number of working chips produced from a silicon wafer. As a result, DRAMeXchange believes flash prices will rise later this year.