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DRAM price concerns stoked by huge SK Hynix factory blaze

by Mark Tyson on 4 September 2013, 16:56

Tags: Hynix

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The second largest maker of dynamic random access memory (DRAM) chips, South Korean firm SK Hynix, today announced that it has closed its plant in Wuxi, China following a fire. Up until today this factory had been producing 12 per cent of the global supply of memory chips, accounting for 40 per cent of Hynix’s DRAM output.

The fire started at around 07.50 GMT while workers were installing chip making equipment and it took around an hour and a half to extinguish. A spokesman for Hynix told Reuters that one person suffered minor injured in the fire. At this time it remains unclear when production can resume at the factory and we have no reports about the extent of damage caused by the fire.

DRAM prices have already ramped up, approximately doubled, during H1 2013 due to a tightening of supply. Meanwhile CEO of tech company Mustek, David Kan told Tech Central that “all [memory] suppliers have stopped quoting prices”. Things will become clearer in the next couple of days following updates from SK Hynix but Kan warned that this fire “could impact the DDR and flash memory market just as significantly” as the 2011 floods in Thailand which had a large impact on HDD pricing and availability. I’d hope that is a bit of newsworthy exaggeration but looking at the pictures of the fire below, from the Chinese ChipHell forum, the fire looks like it was pretty large and damaging.

Hynix is the one of the big three DRAM producers, in second place behind Samsung (32.7 per cent) but ahead of third placed Micron (12.9 per cent). It supplies DRAM to Apple for use in its iPhone range.

UPDATE: Hynix representative Seongae Park has told Reuters that "Currently, there is no material damage to the fab equipment in the clean room, thus we expect to resume operations in a short time period so that overall production and supply volume would not be materially affected". Park added that the large clouds of smoke in the photographs were mainly due to the location of the fire near the factory air purification facilities.

HEXUS Forums :: 10 Comments

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Thanks, I've updated the news with this latest statement.
Hopefully this is true: http://www.reuters.com/article/2013/09/04/us-hynix-suspension-idUSBRE9830SP20130904
]It supplies DRAM to Apple for use in its iPhone range.[/QUOTE
Another reason for Apple to jack up prices even more :-P
For all we know that could be a pile of burning tyres in the car park ;-).
Start a bit of panic, as was done with the Thai floods, the media (including tech media sites) will hype it up and folk will panic buy and suppliers will have a good excuse to put up prices of everything connected.
+1 Myss_tree - and then when everything's back to normal they can resume with their extortionate prices…………………….