DRAM Prices Jump On News Of SK Hynix FAB Fire


A fire at South Korea-based SK Hynix's main DRAM production facility in Wuxi, China, on Wednesday has pushed spot market prices up 20 percent for the chips, according to market analysts at TrendForce. As a result of the fire, several memory suppliers have put shipments on hold until the extent of the fire is better known, according to reports.

The SK Hynix fire occurred late Wednesday and shut down production at the facility, according to the company. The extent of the damage to the facility is unknown, however, TrendForce says key machinery inside the wafer facility is likely damaged. Photos of the fire, posted online, show the SK Hynix facility engulfed in flames and surrounded by smoke.

SK Hynix, who did not respond to CRN's requests for comment, released a statement to Reuters on Wednesday that read: "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 overall production and supply volume would not be materially affected."

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SK Hynix is the world's second-largest manufacturer of DRAM and makes a variety of other products, including NAND Flash and multichip packages made from a combination of die, according to its website. Its China plant accounts for more than 10 percent of the world's DRAM wafer production, according to market analysts at TrendForce. With global supplies of DRAM chips already constricted, the fire could drive up PC prices and create challenges for Apple, Asus and other SK Hynix customers.

"In the event that the main production procedures are halted, the shipment of nearly 11 million notebooks and 10 million smartphone units will be affected within the span of a month," TrendForce wrote in a research note. "Such an event is likely to cause the price uptrend of PC DRAM and mobile DRAM to continue throughout 4Q13."

TrendForce believes it will take about six months for the damage to be fixed. "This is expected to affect the Korean company's production procedures considerably in the near future," it wrote.

PUBLISHED SEPT. 5, 2013