SK Hynix Chinese Memory Plant Suffers from Fire, But Expected to Resume Production Shortly

DRAM Prices May Be Affected by Fire on SK Hynix’s Memory Fab in China

by Anton Shilov
09/04/2013 | 11:02 PM

SK Hynix, the world’s No. 2 maker of dynamic random access memory (DRAM), has suffered from a massive fire on its manufacturing facilities in China. The fire on fab 1 and fab 2 facilities on Tuesday did not cripple critical equipment, according to the company. The DRAM maker expects its factories in Wuxi, China, to resume production shortly.

 

“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. The majority of the cost of the damage will be covered by insurance,” said a spokesman for SK Hynix, reports Bloomberg news-agency.

The fire started at 3:50 p.m. local time on Tuesday during deployment of equipment and was extinguished by 5:20 p.m., according to the company. The fire produced large amounts of black smoke, some of the structures produced open fire. The origins of the fire were concentrated in air-purification facilities.

According to DRAMeXchange, a market tracker, SK Hynix shipped 26.5% of the world’s DRAM output. Theoretically, a fire can cause disruption of memory supplies by the company, which will affect prices of DRAM worldwide.

During the most recent session at Taiwan stock exchange, DRAM prices increased 10% to 19%. 4Gb DDR3 1600MHz memory chips cost $3.438 on average, up 10.19% compared to the previous session. Price of 1Gb DDR3 1333MHz/1600MHz memory chips was up 19% sequentially to $1.904/$1.895 per unit.