Worldwide hardware manufacturers are scrambling to stock up on memory chips to keep generation lines running as Apple Inc.'s (AAPL.O) new iPhone 8 dispatch not long from now debilitates to compound a worldwide press on supply.
While heavyweights, for example, Apple and Samsung Electronics Co Ltd which is likewise the world's top memory chip producer - won't be truly hit, industry sources and experts say some hardware manufacturers are paying a premium to bolt into longer-term contracts.
Others are setting orders sooner than before to guarantee their dangerously low inventories do not become scarce totally.
Chip manufacturing technologies are growing increasingly complex, raising investment costs yet providing less output growth as some suppliers struggle to improve yields. This has caused some chip prices to double or triple from a year earlier.
Some analysts say device makers could be forced to cut down on the amount of DRAM chips, which help devices perform multiple tasks at once, or NAND chips that are used for long-term data storage, on new products if the cannot get enough chips.
A chip supplier source told Reuters a handful of clients have moved to 6-month supply agreements, accepting higher prices than the customary quarterly or monthly deals, to make sure they get enough memory chips for their products.
