Damages at SK Hynix DRAM Plant More Serious Than Expected

SK Hynix’s Chinese Plant May Delay Shipments by Months

by Anton Shilov
09/13/2013 | 11:01 PM

Although SK Hynix said last week that the fire did not destroy crucial manufacturing equipment during the fire at Fab 1 and Fab 2 in Wuxi, China, it looks like the things are more complicated. While some of the manufacturing tools were not damaged during the fire, a lot of equipment has been harmed. All in all, it is going to take months before shipments resume, according to DRAMeXchange market analysts.

Major Damages at Wuxi Plant

 

The fire accident experienced by SK Hynix's fab [the fab 1 and 2 are located in the same complex] originated from its chemical vapor deposition (CVD) machinery. Other than the severely burned down equipment, the fire, heavy smoke, and power shortages are known to have also contributed to the direct contamination of the clean room and the notably damaged wafer production lines, DRAMeXchange claims.

Luckily, SK Hynix's Wuxi Plant is based on a special "Gemini" architecture, which enables the clean room and other important facilities to operate independently. Under such a design, even when a major accident hits an area, a plant would still be able to maintain at least 50% of its total production capacity, based on assumptions of the analysts.

While SK Hynix is believed to have preserved half of its Wuxi plant production, a number of its important facility regions are reportedly still heavily worn down from the smoke. The date for when the final rebuilding procedures will take place, as such, remains highly uncertain.

With the fire originating from within the clean room, the difficulty of recovering the affected half of the capacity in the short term – assuming both the equipment and clean rooms were heavily damaged – are also relatively high. Sources with close knowledge of semiconductor equipment have so far indicated that the recovery process could take as long as three months to half a year to complete. To facilitate the entire process, SK Hynix has sent up to hundreds of professionals and engineers to visit the accident site and to assess the situation more carefully.

Once the damages at the Wuxi Plant are clarified, the DRAM industry is projected to be in for a series of major challenges.

Affected Period May Last At Least Two Months

The fire damages experienced by the Wuxi plant's WIP and the inconveniences caused by the power loss and contamination are expected to lead to a number of problems in the short term. Even if production temporarily resumes, the implementation of various of the necessary clean up procedures, the close examination of the clean room, the re-inspection of the machineries, and the reconfiguration of various manufacturing settings are all expected to restrict the total number of wafers produced.

The SK Hynix Wuxi plant reconfiguration and manufacturing delays, in particular, will likely impact at least two months roughly 260 thousand worth of wafer production.