Xi'an NAND plant output reduced by about 40%? Chuan Samsung will raise the price of SSDs

Abstract: Recently, there are rumors that South Korea's Samsung will increase the price of its SSD because its NAND Flash factory production in Xi'an, China, has been affected by the epidemic in Xi'an.

News on January 6, in the whole year of 2021, due to the shortage of wafer manufacturing capacity, most of the world's semiconductor chips have been out of stock and price increases. But there are exceptions, that is, the price has not risen sharply, and even the price has fallen DRAM and NAND Flash two major products.

However, there have been recent rumors that South Korea's Samsung will increase the price of its SSD because its NAND Flash factory production in Xi'an, China, is affected by the epidemic in Xi'an.

Market research firm TrendForce also previously said that because of the strict lockdown measures implemented by Xi'an for epidemic prevention, Samsung Xi'an NAND Flash has difficulties in human shift arrangements. Due to measures such as crowd control, Samsung's Xi'an plant must continue production with limited manpower. At present, Samsung is actively making adjustments to reduce the impact on production. Although the local government expects to return to normal within one to two weeks. However, if it exceeds expectations, it cannot be ruled out that it will impact the capacity utilization rate of Samsung's Xi'an plant, resulting in a slight decline in output. As for the demand for raw materials, water and electricity required for other production, it can still ensure supply, and Samsung is still confirming the specific impact of the epidemic on it.

According to the latest news in the market, due to the impact of the regional blockade caused by the epidemic prevention and control, Samsung is currently considering raising the quotation of its own brand SSD products from the first quarter of 2022, and there is no further clear information on the specific increase. Market expectations are that the market price movements for the entire SSD may become clearer in mid-January, when brand suppliers in the United States and Europe are expected to gradually resume post-holiday sourcing.

The news pointed out that Samsung's factory in Xi'an, China, its NAND Flash production may be reduced by about 40% due to the city's lockdown management, which may directly lead to a reduction in the output of its consumer SSD and UFS NAND Flash devices, prompting Samsung to consider increasing the SSD quotation. At present, Samsung is still the leader in the global NAND Flash market, and the market share has remained at about 34% for a long time, which is equivalent to one-third of the world's production by one manufacturer.

Although, at this stage, the actual reason why Samsung expects to raise the price of SSD against the trend has not been confirmed. However, Samsung's NAND Flash factory in Xi'an accounts for 42% of Samsung's NAND Flash production capacity, which is about 15% of the global production capacity, so if the output of Samsung's Xi'an plant decreases, the impact on the market is bound to be not small.

Samsung has previously said that the factory can still maintain basic operations under the flexible manpower allocation. However, how much of the gap between the supply and the actual market demand is likely to be the main reason why Samsung is ready to raise the price of SSD.

Editor: Xin ZhiXun - Lin Zi