Production of TLC (triple-level-cell) NAND flash chips has slowed substantially as more suppliers allocate more capacity to MLC (multi-level cell) chips used for embedded multimedia cards (eMMC) and other embedded storage devices, according to industry sources.

Booming demand for eMMC solutions used in smartphones has sent major NAND flash chipmakers including Samsung Electronics and Toshiba increasing production of MLC chips, resulting in their reduced supply of TLC chips, the sources indicated.

TLC NAND flash memory is targeted mainly at the market for flash memory cards and drives. While all available capacity for the chips is limited due to suppliers' increased emphasis on MLC flash memory, the supply of TLC chips is unable to grow fast enough to meet the present demand, the sources pointed out.

Meanwhile, several IC distributors have recently stopped quoting prices for TLC and downgrade flash memory, according to sources at downstream memory makers. The distributors have limited inventories of their own and limited supply from the upstream, and have therefore decided to halt offering quotes believing that prices have room to rise, the sources indicated.

However, downstream device manufacturers have expressed caution that the limited supply of TLC and downgrade NAND flash memory could have a negative impact on the penetration rate for flash drives with USB 3.0.

Previous reports quoted memory module firms as predicting that the penetration rate for flash drives with USB 3.0 could rise to as high as 50% at the end of 2013, and top 30% in all of the year.