Foxconn Electronics reportedly has booked a portion of 512Mb DDR2 production capacity at Winbond Electronics with prices 15-20% higher than the prevailing market price in order to secure a steady supply of memory chips, according to industry sources.

The supply of 512Mb DDR2 chips has become increasingly tight as most memory chipmakers have been allocating more of their capacity for the production of mobile RAM due to strong demand from the smartphone sector, the sources noted.

Additionally, the shift of Samsung Electronics and SK Hynix to focus on the production of high density DRAM devices and phase out from the 128Mb, 256Mb and 512Mb segment has also resulted in tight supply of low-end to mid-range niche type memory chips, added the sources.

Winbond is currently the largest supplier of 512Mb DDR2 chips in Taiwan, as fellow company Nanya Technology is also focusing on the production of 1Gb and 2Gb devices, the sources revealed.

Winbond declined to comment on market reports or any individual client.