[Asia Economy Reporter Jeong Hyunjin] Contamination occurred in materials used for flash memory at two Japanese factories jointly operated by major NAND flash manufacturers Western Digital of the United States and Kioxia of Japan, leading to expected production disruptions.
According to Bloomberg on the 10th, Western Digital announced in a press release that such an incident occurred at two production facilities in Yokkaichi and Kitakami, Japan, jointly established with Kioxia, and that they are doing their best to recover to normal operation. Western Digital currently estimates a reduction in flash memory production of at least 6.5 exabytes (EB).
Although the timing for recovery to normal production levels was not separately mentioned, Bloomberg explained that it generally takes about three months from the silicon wafer stage to become a finished component usable in electronic devices. Previously, Western Digital experienced a power outage at a production facility jointly created with Toshiba Memory in July 2019, which disrupted wafer production of about 6 EB and took about a month to recover. U.S. IT media Tom's Hardware forecasted, "Since production usually takes 2 to 3 months and 3D NAND flash, which has a long cycle, was affected, it is expected to take several months until production resumes."
Due to this incident causing disruptions in NAND supply, NAND prices are expected to rise. Western Digital and Kioxia hold market shares of 13.2% and 19.3% respectively (as of Q3 last year) in the NAND market, competing with domestic companies such as Samsung Electronics and SK Hynix. Aaron Rakers, a Wells Fargo analyst, analyzed, "This incident is clearly a negative issue for Western Digital and Kioxia, but historically, supply disruptions caused by events like earthquakes or power outages have sometimes led to price increases and positive outcomes."
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