In March we saw the enormous devastation caused by the Tsunami in Japan send shock waves through the technology sector. Fear of damage to vital factories, existing inventories, and uncertainty about Japanese infrastructure caused some pretty crazy pricing for a few days directly after the event. There was also a lot of talk in the media about the entire supply chain being a problem, even if there were no real memory inventory shortages. Fortunately these dire predictions were proven incorrect mostly because of the 4 factors below.
1) No major flash manufacturers sustained any direct damage to their infrastructure or manufacturing facilities. The only real slowdowns they suffered were related to shutting down shifts to preserve power for resuce and recovery efforts.
2) The fear of wafer manufacturers and other secondary component makers who were affected not being able to make sufficient product to meet global demand was over-hyped.
3) The global economy has been sluggish and is now entering the summer season where demand is typically lower.
4) Apple, the largest consumer of NAND flash and other major flash consumers didn’t rush their delivery dates and use up available inventories for fear of dwindling supplies. They all waited to see if there was sufficient reason for concern before reacting in appropriately.
Flash is traded as a commodity, just like Oil and Pork Bellies. Because of this prices are continuously changing and are subject to some pretty wild swings at the best of times. Fortunately there was really no material shortage given the factors above and prices returned to normal ranges within a period of a few days.