Earthquakes, tsunamis, hurricanes and now COVID-19. The Fabs of the big HDD and SSD manufacturers are always on everyone’s lips more than for their innovations in the sector because of the shutdowns they have to undergo due to the ravages of nature or even incidents that occur. Today, it is Samsung which underwent a shutdown which has as its protagonist the most famous virus in history and which will stop its two Fabs.
42% of Samsung’s manufacturing discarded by China
It is clear that the virus does not include profits, dollars or production, but earlier this week China boasted of having everything under control through its interventionist policies and control of companies and the population. But “by magic” cases arose and everything got out of hand, forcing in barely a week to switch to a much stricter control system.
On the strength of this premise, the government has ordered the two factories of the Korean giant to comply with the urgent restrictions imposed, which means that according to Samsung itself, 42% of global NAND Flash production could be lost.
What the company is going to attempt is the most logical, not the most efficient, but it has to move:
“We have decided to temporarily adjust the operations of our manufacturing facility in Xi’an, China. This decision was made in accordance with our commitment to protect 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. “
The problem is that these facilities only represent 42% of the company’s production, so they will try to move technical and human material to other Fabs outside of China to lose the minimum possible quota. The problem is the strategic blockade against the virus in the Asian country, which makes it nearly impossible.
34% of global NAND Flash production
The latest analysts’ estimates indicated that Samsung had acquired no less than 34% of global production of these chips and logically that internal production fell by 42% is a sign of alarm in the PC and server markets.
The reasons are simple: in these Fabs, the 136-Layer NAND Flash and the new 176-Layer NAND Flash were created, so components such as the 980 PRO will not be able to enter the market and it is more than likely that DDR5
The most logical thing is that the stock runs out quickly (if there is any, because DDR5 for example is an impossible task) and with it the price goes into pure speculation and goes up quickly. There is no date for the total or partial reopening of the Fab, and knowing China and its management, what is certain is that it will not last long because, as in the rest of the world, infections saturate health systems. The funny thing is that China was the first to suffer from the original COVID-19 and is now the last to do so with the Omicron variant, which will cause more companies to consider leave given current conditions.
Let’s not forget that China uses its own vaccine, which is the least effective against Omicron, so it’s a complicated scenario that could spread to other Fabs from different companies as the virus spreads.
