DigiTimes reported today that NAND flash memory manufacturers have been caught in a tight situation. Apple may be moving to secure long-term supply contracts to ensure they have all they need for iPods, iPhones, and iPads.

The demand for flash memory has been steady, but manufacturers haven't invested in new capacity because keeping the supply limited enables them to keep prices up. But, "some NAND flash controller suppliers have indicated that their supply may not be able to satisfy customer demand in the second quarter." A shortage of flash memory could be disastrous as Apple hopes to push millions of iPads and, hopefully, a refresh of the iPhone.

In November 2005, Apple signed long-term deals with flash memory suppliers that included prepaying up to $1.25 billion in three months to ensure a steady supply through 2010. But since then, they have launched the iPhone and now the iPad. Apple's demand is a significant chunk of the NAND flash memory market, and "sources said Apple may start negotiating long-term supply contracts with its chip partners in the second quarter."

Samsung Electronics is said to continue favoring profitability over shipment volume, meaning they may choose not to be part of Apple's new deal as they were in 2005. Some manufacturer will see the potential and bite the expansion bullet, though. The opportunity is too great to ignore.