Panic Pricing As Memory Chips Rise

Cost of popular flash chips goes up

Martin Wood sells Delkin Devices memory cards around the world, and sales are hot right now.

"We had one customer that would normally buy $100,000 a week," said Wood, Delkin Devices CEO.

This time, to Wood's surprise, that same customer placed a $700,000 order.

On most days, that may be a good day at his Poway office, but Wood is worried about people trying to capitalize on a possible flash drive shortage.

"There are some opportunistic retailers," Wood said.

Toshiba Corporation is one of the leading manufacturers of semiconductors and components supplies.  The Toshiba chips go into everything from iPads to smart phones.  The Japanese factory shut down for a time after a 9.0 earthquake and tsunami earlier this month. 

The ability to ship the memory chips is now a problem, and that is leading to rising prices.

"The price of those chips of existing inventory has gone up 25 percent in the past week alone," said Steven Osinski, San Diego State University business professor. 

He says the disruption of product and distribution is going to impact sales and the selling price.

"Unfortunately there are going to be people gouging prices," Osinski said.

40 percent of the Delkin memory cards, 60 percent come from

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