Major NAND flash makers including Samsung Electronics and Toshiba continue to impose tight supply strategies towards memory card and flash drive manufacturers, which has had a negative impact on the module firms' shipments particularly for USB 3.0 storage devices, according to industry sources.

Samsung has focused on supplying NAND flash to its Galaxy-brand smartphones, while Toshiba intends to hike the memory pricing by cutting down production, the sources indicated. Meanwhile, SanDisk is seeking to satisfy demand for NAND flash solutions used in Apple's iPhone, the sources added.

The tight chip supply, encountered by memory cand and flash drive manufacturers, is also a result of chip suppliers' intention to give priority to orders for embedded memory modules for smartphones, tablets and other mobile devices, the sources pointed out.

With the limited supply of available NAND flash chips, the dedicated memory module sector will become more difficult for less-competitive players to survive, the sources said. The dedicated memory module industry will likely go through another restructuring, with smaller, second-tier players likely to be eliminated, the sources indicated.

The global supply of NAND flash chips to the dedicated memory module sector is expected to remain tight for the next 1-2 quarters, the sources said.