Apple on Monday announced that it has reached long-term supply agreements with five major manufacturers of NAND flash memory. What’s more, two of those companies — Micron Technology Inc. and Intel Corp. — announced the formation of a new company to manufacture NAND flash memory. The memory chips are used in Apple’s iPod shuffle and iPod nano models.
Apple indicated that the agreements secure NAND flash memory through the year 2010. Apple plans to prepay a total of US$1.25 billion for flash memory components during the next three months.
“We want to be able to produce as many of our wildly popular iPods as the market demands,” said Steve Jobs, Apple’s CEO, in a statement.
The other companies named in Apple’s statement are Hynix, Samsung Electronics and Toshiba. Samsung is currently leading the market leadiner, according to a recent report by market research firm iSuppli Corp. iSuppli estimates that Samsung held more than 50 percent of the NAND flash memory market as of the end of the third quarter.
Micron and Intel’s new venture is called IM Flash Technologies, LLC. The companies said that “a significant portion of each of their share” of output will be dedicated to Apple’s needs.
“We are looking forward to working with Micron, and are extremely pleased to have Apple broaden its relationship with us,” said Paul Otellini, Intel’s president and CEO.
Apple is also working with Intel on microprocessors that will serve as the heart of a new generation of Macintosh computer hardware. Earlier this year Apple CEO Steve Jobs announced plans to change Macs from the IBM and Motorola-manufactured PowerPC architecture to chips made by Intel.