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Samsung NAND Production Disruptions Could Drive Prices Up

Power Outage Causes Production Disruption

As any PC system builder knows, the market volatility of NAND and other memory products means that prices can widely swing up or down whenever the wind blows. A minor setback often means that supply is affected, which in turn increases prices since the demand is constantly high. It also does not help that there are only a few manufacturers in the business, so their production schedule pretty much dictates the rise and fall of the market.

The bad news is that Samsung Electronics‘ NAND flash plant in Pyeongtaek recently had a power outage on March 9. This means anything being produced during that period were damaged and are unusable. As Taiwan’s TechNews reports via Digitimes, this accounts for 3.5% of the global supply for March and 11% of Samsung’s overall NAND flash output for the month. This is approximately up to 60,000 wafers damaged for just a 30 minute power outage.

Will This Spike NAND Prices Up?

According to Samsung, they have sufficient inventory to offset the wafer loss. So it should have no major impact on the NAND chip operation.

However, it can still cause a ripple effect in the overall market supply for the coming few weeks. Although there is a slight oversupply in the NAND flash market in the first quarter of 2018. End-market demand growth is slowing down on seasonal factors as major suppliers improve their 3D NAND flash production yield rates. So the lower NAND prices now will most likely move up a bit and stay there for a while. Unless of course, another disruption in production happens.

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