Massive fire in SK Hynix chip plant could drive up SSD prices

vbimport

#1

We’ve just posted the following news: Massive fire in SK Hynix chip plant could drive up SSD prices[newsimage]http://static.myce.com//images_posts/2013/09/myce-sk-hynix-logo-95x75.jpg[/newsimage]

Memory chip giant SK Hynix was forced to close one of their factories due to a large fire today.

            Read the full article here: [http://www.myce.com/news/massive-fire-in-sk-hynix-chip-plant-could-drive-up-ssd-prices-68641/](http://www.myce.com/news/massive-fire-in-sk-hynix-chip-plant-could-drive-up-ssd-prices-68641/)

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#2

Probably RAM (and also GPU) prices will rise, and that was happening not because of any fire in any factory, but mainly because we are getting closer to DDR4.


#3

Too bad Thailand’s spare water wasn’t near enough.


#4

It’s likely to be only a temporary closure of the Chinese factory. SK Hynix produces half of their DRAM chips at the Wuxi plant. Whether this will lead to DRAM price increase, I doubt. Wait and see, and wait for at least two weeks.

I think it was not a massive fire at all. The smoke was massive, and surely it caused a lot of air pollution in the city. Some of the reports on the web says only one “diffusion” equipment at the C2 line is lost. The entire plant stopped instantly, but that’s mostly standard procedure.

Hynix has only about 10% of the world’s NAND flash chip marketshare. The Wuxi plant mostly makes DRAM.


#5

This should only really affect Seagate the most, since they own Hynix now, I doubt Samsung is depending on Hynix DRAM.:wink:


#6

[QUOTE=alan1476;2698534]This should only really affect Seagate the most, since they own Hynix now, I doubt Samsung is depending on Hynix DRAM.;)[/QUOTE]

Hynix is a South Korean electronics company. It was created out of the former LG business group’s semiconductor business unit and Hyundai’s during some of the restructuring efforts partly forced by politicians for political - and strongly personal - reasons. The SK group is married to one of the former South Korean presidents, another Roh. SK bought Hynix hoping it would help SK Telecom’s smartphone business. SK Telecom buys smartphones from Samsung Electronics but Samsung also makes chips (CPU, NAND, mDRAM…) in their phones. Samsung always refused - ignored - to buy Hynix for their own political reasons.


#7

[QUOTE=alan1476;2698534]This should only really affect Seagate the most, since they own Hynix now, I doubt Samsung is depending on Hynix DRAM.;)[/QUOTE]It seems you underestimate the influence of speculators in commodity markets.

If your competitor has to raise their prices, the first thing you do is raise yours too, just not quite as much.


#8

So the company that makes 30% of all memory in the world makes half of that in ONE factory ?


#9

I wouldn’t be surprised if this incident wasn’t used as an excuse to raise prices beyond what would actually be enough to make up for lost profits. “We had to pay the janitor’s medical bills: he stubbed his toe, and needed $200,000 worth of ice to stop the swelling… and don’t get me started on the secretary who broke a nail!”

How much do you want to bet that Microsoft will say the same thing if/when they have a fire. Hopefully Sony will be out of business before their buildings burn!


#10

[QUOTE=Stereodude;2698537]It seems you underestimate the influence of speculators in commodity markets.

If your competitor has to raise their prices, the first thing you do is raise yours too, just not quite as much.[/QUOTE]

Not always true. Just look at ammunition prices in the U.S. There’s a lot places that are selling ammo at regular prices, just limiting people to 1 box of X caliber.


#11

RAM prices have already went up here over the last 24 hours, by an average of 20%. :a


#12

[QUOTE=Dee;2698574]RAM prices have already went up here over the last 24 hours, by an average of 20%. :a[/QUOTE]

That’s suspiciously fast to say the least.

[B]Wombler[/B]


#13

[QUOTE=Stereodude;2698537]It seems you underestimate the influence of speculators in commodity markets.

If your competitor has to raise their prices, the first thing you do is raise yours too, just not quite as much.[/QUOTE]
I know alot more about the commodity markets than you think, Samsung has fixing pricing on their SSDs, they are not going to raise the pricing because their competitor has an issue, that will be fixed asap. Seagate is a very big player, they do not have all their eggs in the Wuxi Plant and this will only be a minor blip on the DRAM exchange, all will be back to narmal in less than a few weeks. I wouldn’t short Hynix at this moment, you may very well reget it.


#14

[QUOTE=alan1476;2698590]I know alot more about the commodity markets than you think, Samsung has fixing pricing on their SSDs, they are not going to raise the pricing because their competitor has an issue, that will be fixed asap. Seagate is a very big player, they do not have all their eggs in the Wuxi Plant and this will only be a minor blip on the DRAM exchange, all will be back to narmal in less than a few weeks. I wouldn’t short Hynix at this moment, you may very well reget it.[/QUOTE]

It’s highly likely the temporary closure will last one or two weeks only. That amounts to less than 2% of the world’s DRAM chips. Hynix can absorb it.

But why are you saying Seagate owns Hynix? It’s SK that bought Hynix a little over one year ago. SK Telecom is the largest shareholder of SK Hynix. Most of what now is SK Hynix was once the semiconductor (DRAM) business of LG Electronics. The late South Korean president Kim Daejung ordered it to be sold to Hyundai. Hyundai helped Kim Daejung to team up with North Korea often sending billions. Kim Daejung’s successor committed suicide, but so did Hyundai’s chief. LG was a much better competitor than Hyundai or Hynix.


#15

[QUOTE=aiolos;2698555]So the company that makes 30% of all memory in the world makes half of that in ONE factory ?[/QUOTE]

30% is a rather exaggerated number. SK Hynix at one moment reached that high a number in the world’s DRAM marketshare, but the average marketshare is more like 25%. At any rate, Samsung makes better chips.


#16

Yeah, China certainly doesn’t need MORE air pollution… It’s quite a catastrophe in and of itself without thinking about what it’s doing to the atmosphere.


#17

So its been a week or so and the prices are still falling.


#18

Various news sources from South Korea and Taiwan say SK-hynix plant in South Korea is increasing PC DRAM production and the one in the mainland China will resume production sometime in October and reach previous capacity by November. It’s possible both Samsung and Micron are increasing PC DRAM production. It’s also possible all three are reducing mobile DRAM and NAND flash production in order to increase PC DRAM production though not necessarily by the same amount.