Western Digital Corp. (WD) released a statement on Feb. 9, 2022, announcing an unidentified material has contaminated its NAND Flash production lines. The incidents occurred at the end of January at its Yokkaichi and Kitakami factories in Japan. Both factories are operated by WD’s joint venture partner, Kioxia. Upon discovery, the production lines were shut down, and there is no indication of when operations will resume at full capacity.
The incident is anticipated to cause a shortage of 6.5 exabytes in flash storage, which according to The Wall Street Journal, is equivalent to 100 million of its 64 GB flash memory cards typically used for digital cameras.
This creates added pressure to memory-chip makers following the sector’s previous manufacturing disruptions. In late December, Samsung Electronics and Micron Technology operations were suspended amid government-mandated COVID-19 lockdowns in Xi’an, China. The restrictions at the Samsung and Micron facilities were lifted in late January; however, it’s uncertain how the manufacturers’ NAND flash and DRAM output were affected. Coincidentally, the incident at the WD/Kioxia factories in Japan first occurred as the other two factories were resuming production.
The production line contamination combined with the existing memory market setbacks is anticipated to push NAND Flash pricing up by 5-10% in Q2. Additionally, WD and Kioxia manufacture PC client SSDs and eMMC products. Supply for these markets is likely to be affected as well.
Frequently Asked Questions
What caused the production shutdown at Western Digital's Japanese factories in early 2022?
Western Digital announced that an unidentified material contaminated NAND Flash production lines at its Yokkaichi and Kitakami factories, which are operated with Kioxia.
What is the estimated volume of the flash storage shortage caused by the contamination?
The incident is anticipated to cause a shortage of 6.5 exabytes in flash storage, which is roughly equivalent to 100 million 64 GB flash memory cards.
How is the NAND Flash market pricing expected to change in Q2?
Due to the contamination and previous market setbacks, NAND Flash pricing is anticipated to rise by 5-10% in Q2.
Besides raw flash memory, what specific product categories might experience supply issues?
Since Western Digital and Kioxia manufacture PC client SSDs and eMMC products, the supply for these specific markets is likely to be affected.
What other recent manufacturing disruptions occurred in the memory-chip sector prior to this incident?
Operations for Samsung Electronics and Micron Technology were suspended in Xi’an, China, in late December due to government-mandated COVID-19 lockdowns.
What services does Fusion Worldwide provide to the electronics supply chain?
Fusion Worldwide is an open market distributor that sources, inspects, tests, and delivers a broad range of electronic components to OEMs, CMs, and ODMs.
