Large Fire At SK Hynix Fab Facility In China — Could Drive Up Both DRAM And NAND Prices

SK Hynix Inc., one of the top global producers of memory chips (both DRAM and NAND), was forced to suspend operations at its Wuxi, China fabrication facility due to a large fire.  Billowing smoke from the fire was visible many miles away.

Smoke-KitGuru-Hynix-FireImage source:  KitGuru.com

The fire reportedly started a bit before 4:00 pm local time while equipment was being deployed.  The fire was reported to be extinguished by  approximately 5:15 pm local time.  The company is still trying to ascertain if there were any casualties, the extent of the damage, and is of course investigating the cause of the fire.  Some reports have indicated that it was due to some sort of chemical explosion.

SK Hynix memory module

The reaction in memory markets was immediate, with prices for DRAM increasing by 10%, and shipments by some manufacturers ceasing within the first hour following news of the fire.  Hynix controls some 30% of the world’s memory production in the area, and this could eliminate nearly half of Hynix’s capacity there.  This would result in a drop in world DRAM production of some 15%.  Other memory manufacturers, such as AMD’s Radeon RAM, could see a nice demand boost, and pricing increase as a direct result of these significant production disruptions.

Smoke-Fire-Hynix-KitGuruImage source: KitGuru.com

What could prove a bit unsettling for the SSD market is the effect this fire could have on NAND pricing also.  Hynix has lately prioritized NAND flash production over DRAM at this facility.  If damage resulting from the fire extends to NAND production areas, this could drive NAND prices up quickly also.

SK-Hynix-nand2

Stay tuned for  further developments…………………..

Smoke-Fire-Hynix-Kitguru-3Image source: KitGuru.com

2 comments

  1. Aw man…Getting the hard drive prices back down after the flooding in Thailand took a LONG time, 18 months to 2 years, if I’m not mistaken. In tech these days, especially SSD tech, this is an eternity.

    • You’re right. The price/Gb is about the same as it was a few years ago, if not more. However Hynix is a smaller player in the NAND game with Toshiba, Samsung, and Micron leading. I wouldn’t be surprised however if they use this as a reason to up the price a little.

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