More than 8% of the world’s NAND flash storage production for the first quarter has been lost because of material contamination during the fabrication process at two facilities in Japan, according to one estimate by an industry expert at Omdia.
Western Digital and Kioxia confirmed the material contamination in separate statements earlier this week at the Yokkaichi Plant in Mie prefecture and the Kitakami Plant in Iwate. The two companies have a joint venture at both facilities, which make flash storage products.
Both companies said they were working to restore the facilities to normal operations as quickly as possible and would not respond to questions from Fierce Electronics on their restoration status on Friday. Neither company has divulged the type of contamination or the source of it.
Only Western Digital, based in San Jose, Calif., would divulge the amount of lost product it has seen; WD said it had lost flash product availability equal to “at least 6.5 exabytes.”
Kioxia, headquartered in Tokyo and formerly known as Toshiba Memory Corp., said the contamination partially affected its 3D flash memory product called BiCS FLASH at both plants. Kioxia said it does not anticipate the shipment of conventional 2D NAND flash memory will be affected “and will continue to make every effort to minimize the impact on customers.”
Craig Stice, chief analyst for semiconductors at Omdia, said he has been led to believe that the 6.5 EB loss is just for WD and that the loss for Kioxia could be “roughly the same if not more as they have majority share of the bit output from the fabs.”
He estimated that with the two losses together, up to 14 EBs could have been lost, which would represent about 23% to 24% of their total NAND bit output for the first quarter. For the entire NAND industry, that amount would be a loss of 8% to 9% of the total NAND bit output for the quarter, Stice said.
In an interesting turn of fate, the NAND market has been in slight oversupply in recent months with prices in decline, despite the widespread concern about chip shortages, which have affected many products but especially trucks and cars using older chip node processes. A loss of 8% of inventory in a given NAND inventory might seem to be fortuitous for producers.
Stice said the production loss impact on end markets is difficult to quantify, however. “Now accounting for the loss, supply and demand could return to relative balance for the rest of the quarter,” he said. “Mobile market storage inventory has been believed to be healthy.”
President Biden and Congress have been working to bolster domestic production of semiconductors and related electronics partly because so much production is based in Asia. U,S. manufacturers have backed the effort and applauded recent passage of a chip manufacturing and research subsidy of $52 billion.
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