Entering text into the input field will update the search result below

The 1999-2000 Memory Shortage Redux - Blame It On The iPhone 8 This Time?

Jul. 03, 2017 1:06 PM ETAAPL, SSNLF15 Comments


  • The iPhone 8 has exascerbated the memory shortage as customers have been moving forward procurement decisions.
  • The rationale is reminiscent of the 1999-2000 DRAM bubble because of perceived shortages of the devices.
  • New NAND fabs and an increase in 2D to 3D NAND conversion will mitigate the supply/demand problem in 2H 2017.

According to a Reuters report, electronics manufacturers around the globe are scrambling for parts, especially for DRAM and NAND chips, to keep their production lines running as Apple’s (AAPL) component orders for its upcoming iPhone 8 are creating a worldwide shortage.

The report noted that:

"After the supply shortages emerged we brought forward our procurement decisions ... to ensure a stable supply," smartphone and personal computer maker LG Electronics said in a statement, adding it had pushed up quarterly purchase decisions by about a month.

Reuters reporters noted that 18% of NAND supply is bought by Apple. They anticipate that as many as 100 million iPhone 8s could be sold this year, significantly more than the 82.3 million iPhone 7s sold in 2016.

I noted in a May 16, 2016, Seeking Alpha article entitled “A Shortage Of NAND Flash Memory Is Coming Soon - What Caused It And What Will Be Its Impact,” that:

“There were no NAND shortages in 2014 and 2015, although they were predicted, as we saw a slowdown in tablet and smartphone sales, flash cards, and USB/flash. Growth, however, was sustained in the SSD sector as they increasingly took market share from HDD sales.”

And that the current shortage in NAND was:

“due to most major vendors not ramping up their 2D NAND flash chips over the past 18 months and that their migration to the production of 3D parts as not being smooth.”

This latest Reuters report corroborates my analysis of the semiconductor market bubble in 2000, which I discussed in a June 12, 2017 Seeking Alpha article entitled “Semiconductor Equipment: Supercycle Or Bubble?” I noted that the 1999-2000 semiconductor bubble was primarily attributed as:

“A perceived shortage of DRAMs. At the time, semiconductor DRAM manufacturers didn't realize that PC manufacturers were purchasing twice the DRAMs they

This article was written by

Robert Castellano profile picture
Providing a deep knowledgebase for better semiconductor stock investments

Dr. Robert N. Castellano, is president of The Information Network www.theinformationnet.com. Most of the data, as well as tables and charts I use in my articles, come from my market research reports. If you need additional information about any article, please go to my website.

I will soon be initiating an investor newsletter. Information to register will be online on my website.

I received a Ph.D. degree in chemistry from Oxford University (England) under Dr. John Goodenough, inventor of the lithium ion battery and 2019 Nobel Prize winner in Chemistry. I've had ten years experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University.

I have been Editor-in-Chief of the peer-reviewed Journal of Active and Passive Electronic Devices since 2000. I authored the book "Technology Trends in VLSI Manufacturing" (Gordon and Breach), "Solar Panel Processing" (Old City Publishing), "Alternative Energy Technology" (Old City Publishing). Also in the solar area, I am CEO of SolarPA, which uses a proprietary nanomaterial to coat solar cells, increasing the efficiency by up to 10%. I recently published a fictional novel Blessed, available on Amazon and other sites.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.