One (another) new wave of COVID-19 infections has caused the temporary closure of operations of Samsung factories in Xi’an, capital of the Chinese province of Shaanxi. These factories are responsible for 15.3% of global NAND chip production, which could cause significant side effects.
In fact, analysts suggest that products based on 3D NAND chips could go up in price. Experts point not only to potential price increases on SSDs or DRAMs, but also possible delays in supply chains that affect other sectors.
Prices could rise, but the problem does not seem alarming at the moment
The Xi’an (Siam) region, famous because the famous terracotta warriors were found there, is now home to two factories with 3,300 employees that are responsible for 42.5% of Samsung’s total 3D NAND chip production. At a global level, this production represents 15.3% of the world total.
This makes it clear that the temporary closure of these factories can have a significant impact in many areas. In TrendForce they indicate that although Samsung already has its needs covered until mid-January 2022, this closure could affect its operations in the short term.
The problems could also cause a domino effect that would cause their chips to delay the production of products based on them, although the factories seem to have “sufficient inventory to continue production in the coming months. “
Analysts at TrendForce, a consulting firm specializing in this segment, indicate that so far there have been no price increases in the NAND Flash chip market because traditional buyers still have enough inventory.
That could prevent price increases, but these analysts “do not rule out the possibility of a price increase in the short term due to the expected psychological impact that triggers this confinement. ” short official statement from Samsung confirms the temporary closure of the factories, although no further information on the situation is given.
These experts still maintain their forecast that the average price in the first quarter of 2022 will fall between 10 and 15%, but They warn that the domino effect could end up infecting manufacturers. That would cause over-demand to avoid risks and, in turn, delays and price increases for other manufacturers. Hopefully everything is a scare.
Via | TrendForce