Power Outage Could Affect Price Of Smartphones & Tablets

Toshiba was forced to suspend production on its line of NAND flash memory chips at its Yokkaichi factory in Mie prefecture earlier this week due to a power failure. This factory is used solely to produce chips that are used in smartphones and other gadgets.

This outage will likely affect the company's output of NAND flash memory used in tablets and smartphones. Despite the fact that the factory was set to resume normal operations by the end of the week, Toshiba has said shipments of NAND from the Japanese plant could be cut by up to 20 percent in January and February.

If shipments are lower than expected, it's possible this power outage could affect the price of NAND memory used in some of our favorite mobile devices such as smartphones and tablets. Toshiba is the world's No. 2 NAND chipmaker after Samsung.

"There could be an increase in prices. We've heard Apple's demand for flash in 2011 is going be up 100 percent over 2010 so this is a bad time to have a shortage," said Kevin Cassidy, an analyst at Stifel Nicolaus.

Higher NAND prices are likely to be passed along to the consumer, which means the price of a new smartphone or tablet could go up as well.

"If flash memory pricing goes up short term because of these supply shortages then it's going to make the new tablets being introduced more expensive because all the tablet guys will just pass on that pricing," said Krishna Shankar, an analyst at ThinkEquity.