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Home › MarketWatch › Memory chip industry has not yet been hit by novel coronavirus
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Memory chip industry has not yet been hit by novel coronavirus

SemiMediaEdit
February 4, 2020

Beginning in January, due to the spread of the novel coronavirus in Wuhan, China, some people worry that the memory chip industry will be affected by the virus. In response to this concern, DRAMeXchang pointed out yesterday that none of the DRAM and NAND Flash factories in China are currently not shut down, and production will not be affected in the short term.

The spread of the virus has led to the closure of multiple cities or traffic restrictions, and major memory factories in China may face problems with raw material procurement and finished product shipments. Taking Wuhan-based YMTC as an example, Cowen analyst Krish Sankar pointed out that if the spread of the virus causes inadequate, blocked, or even suspended production of raw materials, it may affect the production of YMTC. In response to this problem, YMTC said that the current factory is operating normally, and the supply of raw materials and logistics are currently being coordinated to ensure the normal operation of the production line.

Regarding the direct impact of YMTC on the memory chip market, DRAMeXchang believes that the current production capacity of YMTC's Wuhan plant only accounts for about 1% of the total NAND Flash industry's production volume, which has limited direct impact on market supply, but if the duration of the virus event is prolonged, it may affect YMTC's expansion plan for the second quarter.

Regarding SK Hynix, DRAMeXchang said that SK Hynix's factory is far from Wuhan and has no direct impact. On the whole, the actual impact of DRAM production is not significant, but it is unclear whether there will be a shortage of materials due to the impact of the overall logistics and transportation system.

In addition, Samsung and Intel's NAND Flash factories are located in Xi'an and Dalian. DRAMeXchang said that because the areas where the two factories are located were not seriously affected by viruses, some employees have resumed work on February 3, and the factories are operating normally.

In the short term, memory production sites in China can use inventory or coordinated measures to maintain normal production, but since the virus control is still unclear, it is uncertain whether there will be adverse effects on the market in the future. According to earlier predictions from the industry, the memory industry will rebound this year, but if the virus events continue to intensify, it may cause demand to decline.

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