The Old Conundrum

Six weeks after Toshiba announced it was cutting production of NAND flash by 30% (on July 24th), and  five weeks after Samsung and  Hynix said they would cut flash production by 10% (on Aug 7th), OCZ Technology, which makes SSDs, says it can’t get enough flash chips.

"Despite achieving bookings in excess of our expectations for our second fiscal quarter, we were not able to meet our previously stated revenue guidance due primarily to constraints in NAND flash supply," says Ryan Petersen, OCZ's CEO.

When Toshiba cut production in July, it said that oversupply of NAND flash memory in the retail market, for application in USB memories and memory cards, had resulted in continual price declines since the beginning of this year, says Toshiba, and this cut was needed to balance supply and demand.

Many analysts were surprised that  Toshiba would cut production just as the smartphone launch season was beginning with Nokia, Motorola Mobility and Apple all launching new phones. About half Toshiba's output is thought to go to Apple.

Unless, of course, the suppliers wanted to achieve good prices.

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