The 64Gb NAND flash memory market segment has been growing, driven by strong demand for smartphones and tablets. Prices for the high-density chips have stayed high to reflect that the current supply is insufficient to satisfy demand, according to industry observers.

Brisk demand coming from the smartphone and tablet markets has also had a negative impact on chip supply to the spot market. At the moment the priority of NAND flash suppliers is shipping to system manufacturers, said the observers, adding that many downstream module houses and channel distributors have failed to secured a steady supply.

The tight supply of eMMC devices, for example, is encouraging chip firms to give priority to high-margin orders, the observers indicated. Orders for smartphones, which supports up to 64GB internal memory, have higher margins compared to those for feature phones and other consumer technology products, the observers said.

Speculation has also been circulating that Samsung Electronics - currently the industry leader for NAND flash production - has placed eMMC device orders with fellow competitor Toshiba for the recently-unveiled Samsung Galaxy S4 smartphone slated to go on on sale later this month (April 2013). Samsung's own supply of eMMC devices is falling short of demand for its brand smartphones.

In addition, the fast-growing tablet market in China plays another major consumer of total NAND flash memory, the observers pointed out. China's local white-box tablet manufacturers are aggressively sourcing additional NAND flash chips, acknowledging the market will boom in 2013, the observers said.