Fire at Hynix kills drops world RAM production.

[BRiT]

Just saw this blurb about the damage so thought I'd share it.

From Xbit -- http://www.xbitlabs.com/news/memory...nix_DRAM_Plant_More_Series_Than_Expected.html

SK Hynix’s Chinese Plant May Delay Shipments by Months

Although SK Hynix said last week that the fire did not destroy crucial manufacturing equipment during the fire at Fab 1 and Fab 2 in Wuxi, China, it looks like the things are more complicated. While some of the manufacturing tools were not damaged during the fire, a lot of equipment has been harmed. All in all, it is going to take months before shipments resume, according to DRAMeXchange market analysts.

With the fire originating from within the clean room, the difficulty of recovering the affected half of the capacity in the short term – assuming both the equipment and clean rooms were heavily damaged – are also relatively high. Sources with close knowledge of semiconductor equipment have so far indicated that the recovery process could take as long as three months to half a year to complete. To facilitate the entire process, SK Hynix has sent up to hundreds of professionals and engineers to visit the accident site and to assess the situation more carefully.

Once the damages at the Wuxi Plant are clarified, the DRAM industry is projected to be in for a series of major challenges.

The SK Hynix Wuxi plant reconfiguration and manufacturing delays, in particular, will likely impact at least two months roughly 260 thousand worth of wafer production.

 

[Silent_Buddha]

Ouch, I'm glad I'm not going to be needing more memory for a while (bought 32 GB [4x8GB sticks] for a little over 100 USD before memory prices skyrocketed last winter). Although I imagine this is going to have a potential effect on upcoming graphics cards and Sony's cost to manufacture the PS4 in the future as well as Microsoft's cost on the Xbox One.

Although in theory as long as Hynix can meet their contractual obligations and if Sony and Microsoft had contracted manufacturing at certain price point, then it may not affect them in the short term. But if Sony ends up having to source GDDR5 from another manufacturer if Hynix can't meet contractual quantities, that may hurt them a fair bit. I can't remember, is MS sourcing DDR3 from Hynix as well?

Even with being skeptical of the extent of the damage due to the wording that the Hynix representative initially used, I wasn't expecting the actual damage to be so much worse than my pessimistic expectations.

Regards,
SB

 

[Wynix]

Ouch, I'm glad I'm not going to be needing more memory for a while (bought 32 GB [4x8GB sticks] for a little over 100 USD before memory prices skyrocketed last winter). Although I imagine this is going to have a potential effect on upcoming graphics cards and Sony's cost to manufacture the PS4 in the future as well as Microsoft's cost on the Xbox One.

Although in theory as long as Hynix can meet their contractual obligations and if Sony and Microsoft had contracted manufacturing at certain price point, then it may not affect them in the short term. But if Sony ends up having to source GDDR5 from another manufacturer if Hynix can't meet contractual quantities, that may hurt them a fair bit. I can't remember, is MS sourcing DDR3 from Hynix as well?

Even with being skeptical of the extent of the damage due to the wording that the Hynix representative initially used, I wasn't expecting the actual damage to be so much worse than my pessimistic expectations.

Regards,
SB

Who says that they are getting RAM from Hynix? and even if they are who says they are the sole provider?
Also both Sony and MS should have already signed contracts locking their prices for several months.

 

[entity279]

Can't this all be a conspiracy to increase RAM prices? Wouldn't be the first one. Not saying that the fire was deliberate, but that the event is being used in a profitable way after its occurence.

It's rather strange that one day we hear about major damage and then another that nothing is serious and so on..

 

[Silent_Buddha]

Can't this all be a conspiracy to increase RAM prices? Wouldn't be the first one. Not saying that the fire was deliberate, but that the event is being used in a profitable way after its occurence.

It's rather strange that one day we hear about major damage and then another that nothing is serious and so on..

It can and it can't. In the short term it won't affect any contracted pricing. So it's mostly the spot market.

However, in the case of Hynix customers it could impact their contract pricing if Hynix can't supply the contracted number of memory chips. At that point their customers have to either hit the spot market or contract with another manufacturer (at the increased prices).

For other manufacturers this is good. For Hynix, this is bad. Hence, why the Hynix representative wanted to downplay any potential damage when he was asked for comment.

Of course, there's always the chance that Hynix could be duplicitous and extend how long it will take to effect repairs and resume manufacturing but that hurts them as well since it potentially drives away established customers to other memory manufacturers. So it's not a situation they want to be in. You never want to lose established customers (hence why they get preferential pricing).

Regards,
SB