Having just accidentally blitzed the detailed first version of this post, I’m in no mood to recreate it in detail, so I’ll be brief and to the point (which would be a first).

With the announcement of the Ipod nano, Flash memory is stepping to the forefront as a viable (OK, much better) alternative to the hard drive.  Smaller, more efficient, no moving parts (less heat) and able to withstand rugged environments.  As cost comes down and storage capacity increases, we’ll see Flash memory make its way into an increasingly large number of consumer products.  Flash based laptops anyone?

So from an investment standpoint, how to profit?  While there has been no official word on just who is supplying all that Flash memory to Apple, the persistent rumor is that Samsung is that supplier.  There are reports from industry analysts that Samsung has been courting Apple and that Apple has purchased 40% of the NAND Flash inventory for the second half of the year.  Of course, its possible that Apple has inked deals with more than one supplier to ensure supply for the Christmas season, but it seems more than reasonable that Samsung would be the major supplier.  With profit margins the highest in the industry at 45%, its thought that the company has the wiggle room to provide steep discounts to Apple.. something other suppliers could not do.

Here are links to a few articles discussing the relationship:
http://news.yahoo.com/s/nm/20050831/tc_nm/asia_chips_dc
http://www.tomshardware.com/hardnews/20050907_145240.html

Unfortunately, there is no way for US investors to invest directly in Samsung.  The best option that I can see is through the Ishares South Korea ETF (EWY), in which Samsung makes up 23%.  It broke out from a nice looking base at the beginning of July and recently bounced off support of the 50 day moving average.  It currently sits 10% above that support line.