Fire at a Major Chip Manufacturing Plant in China Rattles World Chip Supply
Irvine, CA – September 11, 2013.
On September 4th, SK Hynix had a fire at their dynamic random access memory (DRAM) production facility in Wuxi, China. There has been a lot of sensational news and rumors regarding the extent of the damage, ranging from Hynix downplaying the incident to their competitors holding off quoting component pricing.
The DRAM components manufactured at this SK Hynix facility are used in memory and storage for a variety of computing devices, including DIMM modules for desktop, laptop, server and mobile devices. Because of the variety of devices that are dependent on these components, the impact will resonate throughout the technology industry.
This Hynix facility produced 10-12% of the world’s DRAM wafer and component supply, which represents 40-50% of their total DRAM production. As the second largest DRAM manufacturer behind #1 Samsung and ahead of #3 Micron, this represents a very high-stakes game in overall market share, stock value and profit. With the interruption to the supply of DRAM to the market, the immediate effect on DRAM component pricing has been a 15-20% increase, with potentially higher average selling prices (ASPs) as more details are announced on the impact of the overall DRAM supply.
Axiom is working with our component suppliers to solidify and insure our DRAM allocation through 2013 into Q1 2014. We expect higher pricing through 2013 and anticipate the Hynix fire to reverse the trend of falling DRAM prices into Q1 2014. Axiom is proactively notifying our channel partners and distributors on this fluid situation and will notify our customers and partners on any material updates.
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About Axiom Memory Solutions
Axiom is a leading provider of customer-focused IT computing memory, storage and networking connectivity upgrade solutions. Pace-setting technologies, highly reliable computing and stringent manufacturing and testing standards uniquely position Axiom to deliver the highest level of compatibility and consistency. Our advanced testing ensures that our products are 100-percent guaranteed compatible and comply with all industry standards. Headquartered in Irvine, California, Axiom is among the fastest growing memory, storage and fiber-optic connectivity product suppliers in the corporate market segment.
Dave Sutherland, Axiom