Reporting by XinZhiyuan
Edit: Good sleepy little salted fish
Recently, the sudden epidemic has made Xi'an, the investment and production center of high-tech enterprises, press the "pause button". However, both Samsung and Micron have said they will do their best to meet the needs of their customers, and the price and supply of NAND and DRAM around the world will not be too abnormal in the short term.
Recently, the local epidemic in Shaanxi has made people feel sad.
According to CCTV News, the National Health Commission reported that at 0-24:00 on December 30, there were 166 new cases in the local area (165 cases in Shaanxi, including 161 cases in Xi'an City, 2 cases in Xianyang City, 2 cases in Yan'an City; 1 case in Shanxi, in Yuncheng City), including 1 case from an asymptomatic infected person to a confirmed case (in Shanxi).
The sudden outbreak of the epidemic made Xi'an press the "pause button".
Xi'an is not only the ancient capital of the millennium, as the investment and production center of high-tech enterprises, Xi'an has gathered a large number of technology companies, including chip companies.
According to the data released by the Shaanxi Semiconductor Industry Association, in 2020, the scale of the manufacturing industry in Xi'an integrated circuits will reach 76 billion yuan, ranking first in the country; the output value of chip design will be 14 billion yuan, ranking sixth in the country; and the output value of chip packaging and testing will be about 12 billion yuan, ranking fourth in the country.
After Xi'an announced the epidemic prevention and control measures, on December 29, global semiconductor giant Micron issued a statement in response to the impact of the current situation on chip production and delivery.
Micron technology said in a statement that THERE may be a supply delay in the DRAM memory chips used in data centers.
Samsung also issued a statement on the same day, announcing a temporary adjustment to the operation of the NAND flash memory chip manufacturing plant in Xi'an.
By the way, NAND flash memory chips are commonly used for data storage in data centers, smartphones, and other technology products.
TrendForce said smartphone and laptop manufacturers could be directly affected by operational changes at Samsung's Xi'an production site.
But they pointed out that in the short term, Samsung's relatively high inventory levels can still meet the needs of most customers.
Similarly, Micron said in a blog post: "We are fully mobilizing our global supply chain to provide our customers with DRAM products. We expect these efforts to enable us to meet the needs of the majority of our customers, but there may be some short-term delays."
Micron added that Micron will strive to minimize the risk of virus transmission and has taken a series of measures to actively cooperate with the prevention and control of the epidemic.
Samsung production continues
On December 29, Samsung issued a statement saying it would temporarily adjust the operation of its production facilities in Xi'an.
"This decision is based on our commitment to protecting the health and safety of our employees and partners, which remains our top priority. We will also take all necessary measures, including leveraging our global manufacturing network, to ensure that our customers are not affected."
On the same day, Samsung Electronics sent a letter to customers informing that it expects that the manufacturing capacity of NAND products may be affected by the epidemic in Xi'an and temporarily stop quoting.
At present, Samsung's semiconductor factory is still in production operation.
The relevant person in charge said that Samsung's semiconductor factory in Xi'an has adopted fully enclosed management measures for on-the-job personnel and logistics vehicles in accordance with the local government's epidemic prevention requirements, which can ensure basic operating conditions.
Samsung has invested more than $10 billion in Xi'an and has two NAND flash memory manufacturing plants, which were put into operation in 2014 and March 2020, with a total of more than 3,300 employees.
The plant's total monthly capacity is about 250,000 pieces, accounting for 42.5% of Samsung's total NAND flash memory capacity and 15.3% of the global total capacity.
As of the third quarter, Samsung was the world's largest NAND manufacturer, with a market share of 34.5%.
According to TrendForce, Samsung is ready to meet customer inventory by mid-January, and both spot buyers and sellers have large amounts of NAND inventory.
Unless it takes too long, Samsung's production adjustment may not have a significant impact on global NAND supply or prices.
Micron's delivery was delayed
On December 29, 2021, Micron Technology issued a statement saying that the epidemic control will cause dram assembly and testing business to be affected to a certain extent.
In addition, Micron said it is working with suppliers and local governments to find solutions that will minimize the impact of the situation and keep the site safely operating.
In addition, Micron said the plant is taking appropriate steps to minimize the risk of virus transmission, including maximizing physical distancing and temporarily reducing crowd density, further facility reconfiguration and ionization of air flow, advanced electronic contact tracing, and more.
According to the data, Micron Xi'an Factory was established in 2006, mainly engaged in integrated circuit assembly and testing and DRAM module manufacturing. The plant is instrumental in Micron's continued success in the DRAM markets such as networking, cloud and data centers.
Nvidia inexplicably lay the gun
On the day of Samsung's statement, Nvidia's shares fell $3.21, or 1.06%, to close at $300.01.
From the 10-K documents submitted by Nvidia, it is known that since Samsung is a supplier of its semiconductor chips, investors are worried that the slowdown in Samsung production will also affect NVIDIA.
However, it can be seen from relevant reports that the semiconductor chips produced by the Xi'an factory are used to make memory rather than graphics cards.
In addition, Nasdaq analyzed that while it may be necessary to focus on the indirect impact on the supply chain, it is not a good reason to sell Nvidia shares.
Therefore, sometimes you still have to improve your knowledge level, don't listen to the wind is the rain.
Resources:
https://siliconangle.com/2021/12/30/samsung-micron-memory-fabs-xian-affected-covid-19-lockdown/
https://www.nasdaq.com/articles/why-nvidia-stock-stumbled-today
https://content-static.cctvnews.cctv.com/snow-book/index.html?toc_style_id=feeds_default&share_to=wechat&item_id=7036618938832166576&track_id=1F630339-EC19-408C-8DDB-DCE8806973B3_662606613339
Samsung Statement:
https://news.samsung.com/global/regarding-the-situation-in-xian-china
Micron Statement:
https://www.micron.com/about/blog/2021/december/micron-statement-on-current-situation-in-xi-an-china