Feeds

DON'T PANIC says Hynix, China fab explosion is no big deal

Fears of memory price spike misplaced says company

Top three mobile application threats

Pics Fears that an explosive fire at SK Hynix's Chinese fabs in Wuxi will cause a spike in chip prices are unfounded, says the company.

"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," company representative Seongae Park told Reuters. "In addition, we expect that the majority of damage will be covered through insurance."

According to local media, a chemical explosion ignited a fire in fabs one and two at the Hynix plant in Wuxi during a refit. Hynix has been repurposing the fabs for NAND production instead of DRAM, and reports say the explosion occurred when new equipment was being installed.

Despite some apocalyptic photos from people on the scene, Hynix says the fire was put out in just over two hours and only one person was injured. No date has been given for when production will restart, but analysts are still predicting a spike in prices.

"While the estimated start up of this China fab is unknown, we estimate it could contribute 15-20% of the worldwide DRAM capacity," wrote Piper Jaffray analyst Jagadish Iyer. "We expect this incident to have a favorable near-term impact on DRAM pricing which has been down anywhere from 5-15% for this quarter (ytd is up > 70%)."

That "favorable near-term impact" means higher prices for OEMs and consumers, and there were reports that other chip manufacturers such as Hynix rival Micron were shutting down sales until a full damage assessment was made public. Micron told El Reg the reports were incorrect.

The incident brought back memories of the 1995 fire at the Sumitomo Chemical Company's Japanese plant, which destroyed half the world's supply of the resin used in memory chip manufacture. RAM prices went through the roof until new facilities could be brought online and OEMs that hadn't buffered supply chains were hit hard.

More recently, torrential rains and flooding in Thailand knocked out Western Digital's hard disk drive plant near Bangkok, causing hard disk prices to double in two weeks, and then rise still further. This was good news for the competition but bad news for buyers.

While Micron's stock price is up over 6 per cent on news of the fire, it doesn’t seem as though OEMs have much to worry about this time. Hynix may be the second biggest memory chip firm in the business, but it seems that there's enough slack in the market to cope – based on Hynix's report, at least. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
Feast your PUNY eyes on highest resolution phone display EVER
Too much pixel dust for your strained eyeballs to handle
Samsung Galaxy S5 fingerprint scanner hacked in just 4 DAYS
Sammy's newbie cooked slower than iPhone, also costs more to build
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Report: Apple seeking to raise iPhone 6 price by a HUNDRED BUCKS
'Well, that 5c experiment didn't go so well – let's try the other direction'
Rounded corners? Pah! Amazon's '3D phone has eye-tracking tech'
Now THAT'S what we call a proper new feature
Leaked pics show EMBIGGENED iPhone 6 screen
Fat-fingered fanbois rejoice over Chinternet snaps
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
US mobile firms cave on kill switch, agree to install anti-theft code
Slow and kludgy rollout will protect corporate profits
AMD unveils Godzilla's graphics card – 'the world's fastest, period'
The Radeon R9 295X2: Water-cooled, 5,632 stream processors, 11.5TFLOPS
Sony battery recall as VAIO goes out with a bang, not a whimper
The perils of having Panasonic as a partner
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.