A Reuters article in CNET News reports Samsung Electronics, the largest memory chip producer in the world, is predicting a global shortage of DRAM chips as chipmakers rush to switch production from these basic memory chips to flash memory. Chipmakers need to fulfill the demands of camera phones as well as digital cameras.
The article notes, "A rebound in corporate spending is expected to drive double-digit growth in PC demand at the same time as chipmakers cut DRAM capacity to instead make flash memory chips to meet explosive demand for camera phones and digital cameras."
Chin Yeong-hoon, an analyst at Daishin Securities, says he expects Samsung to have cut DRAM production to 60 percent of its total memory production this quarter. This allows the company to increase flash memory output by 35 percent.
Can't meet demand
Reuters reports, "Demand for flash, which stores and erases data quickly in digital electronic goods, is so strong that Samsung has said it was meeting only 60 percent to 70 percent of demand."
Samsung predicted it would sell 65 million cellular phones this year compared to 55.6 million last year.
Motorola has attributed its delay in releasing camera phones to shortages of components.
It's important to understand the dynamics of all the links in the camera phone value chain when analyzing the market.
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