Western Digital and Armored Flash production lines were polluted and shut down, which may cause NAND Flash price fluctuations

Western Digital and Kioxia announced yesterday that two flash memory factories were shut down due to material contamination. Some research institutions pointed out that the combined market of Western Digital and Armored Man in the third quarter of last year accounted for as much as 32.5%, and under the influence of this event, the price of NAND Flash in the second quarter may turn up by 5 to 10%.

On February 9, Western Digital and its production partner, Jiaoxia, said that contamination of materials used for flash memory chip production caused the shutdown of two of its factories in Japan's Yokkaichi and Kitakai.

Kaixia does not expect shipments of traditional 2D flash memory, and 3D NAND flash memory is the main product affected. Western Digital said the accident would reduce the production of 3D NAND flash memory by at least 6.5exabytes (about 6500M GB).

Synnet said there was no supply impact, and analysts predicted that the price decline of NAND Flash would converge further

According to a survey released by TrendForce Jibang Consulting, the damaged elements accounted for 13% of the group's output in the first quarter of this year and about 3% of the total output of the whole year. Jibang Consulting further said that the damage announced by WDC is likely not the total loss of the incident, and the number of damaged parts of the armor has not been combined, so the total number of bits affected is likely to increase further.

The customer base of Jiaoxia issued a statement today, saying that the company has signed a long-term supply contract with the original factory of Jiaoxia and other NAND suppliers, and in the priority guarantee contract, the supply has no impact. Qunlian said that since October 2021, the inventory level has begun to be constructed, and as of January 2022, the inventory water level has reached a record high, and the supply is worry-free in the short term.

Global semiconductors as a whole showed a shortage of supply, but NAND Flash was oversupplied and faced downward pressure in the first and second quarters of this year. Some analysts believe that after Samsung's Xi'an factory is controlled by the epidemic, this event will further reduce the price decline of NAND Flash to 5 to 10%, and turn into a 5 to 10% increase in the second quarter.

Jibang Consulting estimates that the NAND Flash market throughout the year shows a slight oversupply trend, the average price from the first quarter to the second quarter has a downward pressure, considering the significant impact of western data material pollution, coupled with the previous Samsung due to the epidemic control in Xi'an has also promoted the decline in the price of NAND Flash, the price decline in the first quarter will therefore converge to 5 to 10%.

Analysts also pointed out that the combined market of Western Digital and Armored Man in the third quarter of last year accounted for as much as 32.5%, and under the influence of this event, the price of NAND Flash in the second quarter may turn up by 5 to 10%.

Lu Xingzhi, a well-known semiconductor analyst, posted on Facebook today, saying that he began to look at the semiconductor industry in 1995 and observed a phenomenon, that is, "every time the memory or semiconductor downward price cycle comes, there is always an unexpected earthquake, fire, material pollution, power outage to put a brake on the supply and stabilize the price", which makes him feel very strange.

Lu Xingzhi said bluntly: "Is this the frequency of chaos too high, is God playing tricks on us, or is it people doing something wrong?" He's also curious about how these semiconductor-related insurers are responding.

At present, it is the decline in the NAND Flash market, for which analyst Lu Xingzhi released Facebook said it was very strange. He believes that since he looked at the semiconductor industry in 1995, whenever the memory encounters an upstream and downstream cycle, it will deliberately put a brake on the supply and stabilize the price.