LONDON Apple Computer Inc. has agreed to pay $1.25 billion over the next three months to NAND flash memory makers as a pre-payment to try and make sure chip makers get production capacity in place for non-volatile memory supply through 2010.
The NAND-style of flash memory is a key component the latest version of the iPod music player and because of its non-volatility is likely to be key in a multitude of consumer electronics devices.
Apple (Cupertino, Calif.) said it has reached long-term supply agreements with Hynix Semiconductor Inc., Intel Corp., Micron Technology Inc., Samsung Electronics Co. Ltd. and Toshiba Corp. to secure the supply of NAND flash memory through 2010. How the payments would breakdown by vendor or whether they are set at $250 million per company was not disclosed by Apple.
However, the deals with Intel and Micron are worth $250 million each, according to Intel, which said they would support plans put together by the two companies to create a manufacturing joint venture called IM Flash, announced Monday (Nov. 21).
“We want to be able to produce as many of our wildly popular iPods as the market demands,” said Steve Jobs, Apple’s chief executive officer, in a statement.