This probably isn’t the kind of thing you want happening among your suppliers.
According to Bloomberg, Western Digital and Kioxia Corp. reduced production at two plants in Japan after contaminated materials were discovered, thereby ruining approximately 6.5 million terabytes of storage. The incident could lead to further price inflation and delays in consumer electronics.
Western Digital, and Kioxia are currently two of the largest producers of flash memory in the industry, and contamination of materials as their plants in Yokkaichi and Kitakami have led to limited production of flash memory, which in turn could affect the larger industry.
It’s unknown as to how extensive the disruption could be, and a Wells Fargo analyst says when combined with Kioxia’s loss of production, the number would be about 16 exabytes lost.
The incident could also combine with industry price hikes and a strained global supply chain that could lead to supply shortages and price increases.
However, Samsung and Micron may be able to limit industry impact with their own flash memory production. Since flash memory is an industry-standard, the components can be sourced from any company.
Flash memory is used to produce solid-state memory used in Apple’s iPhone, iPad, Mac, and Apple Watch products. While Samsung is a major producer of these components, a reduction in supply from two other major suppliers will place increased demand on Samsung’s output.
Western Digital and Kioxia have yet to provide an estimate as to when production will be restored, and it’s thought that the total impact of the incident will be about 10 percent of the market consumption for a quarter.
Kioxia’s statement worked to be more positive, pointing out that the product line impacted produced 3D flash, which is newer and more expensive. It estimates that shipments of its conventional 2D NAND flash memory will not be affected.
Stay tuned for additional details as they become available.
Via AppleInsider and Bloomberg