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Chinese DRAM Plant Fire Continues To Drive Up Memory Prices

Posted by Unknown on from the things-that-go-boom dept.

Nerval's Lobster writes "Damage from an explosion and fire in SK Hynix's Wuxi, China DRAM fabrication plant will drive up global memory prices for PCs, servers, and other devices, according to new reports. Most of the damage from the Sept. 4 fire was to the air-purification systems and roof of the plant, according to announcements from parent company SK Hynix, which predicted the fab would be back to full production in less than a month. The Wuxi plant makes approximately 10 percent of the world's supply of DRAM chips; its primary customers include Apple, Samsung, Lenovo, Dell and Sony. SK Hynix is the world's second-largest manufacturer of memory chips, with a market share of 30 percent, lagging behind Samsung Electronics with 32.7 percent. In an update published Friday, market-research firm DRAMeXchange reported that damage from the fire, smoke and power outages left at least half the plant inoperable or at reduced capacity. The plant is designed to isolate damage in case of disaster so that at least one of its two parallel production facilities can remain online. The facility itself restarted production Sept. 7, according to a statement from the company."

6 of 112 comments (clear)

  1. How oddly reminiscent by ddegirmenci · · Score: 4, Insightful

    of the flood that hit a couple years ago, halting 70(?) percent of HDD production...

  2. This is why terrorists are stupid. by tlambert · · Score: 4, Insightful

    This is why terrorists are stupid. Damage an air conditioner, unprotected from a parachutist, on the outside of a DRAM plant = billions of dollars of economic damage.

  3. Price Increase? BULLSHIT! by mrpacmanjel · · Score: 5, Insightful

    So let me get this straight:

    A single manufacturer (2nd-largest market share though) suffers reduced production of chips (silicon not deep-fried - sort of!)
    Manufacturing plant will be operational within a month
    There are other manufacturers that make the same thing
    Another manufacturer has largest market share
    10% world-wide "shortage" is result

    Global prices have to increase?....Sorry, I smell bullshit.

    1. Re:Price Increase? BULLSHIT! by Xtifr · · Score: 4, Insightful

      It's worse than that. If this plant produced 10% of the world's supply, and its output was cut in half, that means we've only lost 5% of our normal production.

  4. inb4 by Hognoxious · · Score: 4, Funny

    inb4 the idiots who don't understand price elasticity

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  5. Scare tactics by jklovanc · · Score: 4, Insightful

    It is strange how a 5% (a plant producing 10% working at half capacity) reduction in capacity can result in large price changes. This is where I have issue with supply/demand pricing. If one can convince buyers something is scarce the price goes up even when the scarcity is not real.