Prolonged lockdown has a negative impact on both industry conditions and performance
ASML German factory fire… Concerns about aggravating semiconductor supply shortage
(Xian AP = Yonhap News) A woman runs on an extremely quiet road on the 6th in Xi’an, Shaanxi Province, northwestern China, where the entire city is closed due to the outbreak of a new coronavirus infection (Corona 19). Xi’an, with a population of 13 million, has been under lockdown since the 23rd of last month to prevent the spread of COVID-19. 2022.1.7 [email protected]
(Seoul = Yonhap News) Reporter Jae-Young Cho = Memory semiconductor manufacturers are also nervous as the total lockdown measures in Xian, China, are prolonged due to the spread of the novel coronavirus infection (Corona 19).
Samsung Electronics with a large-scale semiconductor production line in Xi’an as the city lockdown continues for the third week[005930]and Micron of the United States are currently experiencing disruptions in production.
However, there are positive analyzes that this will paradoxically lead to a shortage of supply and an increase in memory prices, which will act as a ‘good news’ for manufacturers’ earnings.
However, there are concerns that if the lockdown is prolonged, it may be pushed to the ‘worst’ situation in which the production line stops, which could have a negative effect.
According to the industry on the 9th, Samsung Electronics has been reducing its Xi’an semiconductor production line since December 29 last year.
Earlier, on the night of December 22, last year, the city’s quarantine authorities in Xi’an imposed a total lockdown, prohibiting going out to 13 million residents.
For a week after the lockdown, Samsung Electronics has been operating its factories normally by putting in as much manpower living in dormitories and hotels as possible.
However, as the lockdown became longer and it became difficult to work shifts due to self-isolation measures, production cuts began on the 29th of last month.
(Xian Xin = Yonhap News) In Xi’an, northwestern China’s Shaanxi Province, where the entire city was blocked due to the outbreak of a new coronavirus infection (Corona 19), a volunteer in a protective suit handed food to a nurse at a cancer hospital where access was blocked on the 5th. are giving Xi’an, with a population of 13 million, has been under lockdown since the 23rd of last month to prevent the spread of COVID-19. 2022.1.6 [email protected]
Recently, it is reported that the number of daily confirmed cases in Xi’an has decreased from triple to double digits, but it is difficult to predict when the lockdown will be lifted.
According to China’s state-run Xinhua News Agency on the 7th, the city of Xi’an decided to allow supermarkets, fresh food stores, and other suppliers of daily necessities to resume business after evaluating the prevention of COVID-19.
A Samsung Electronics official said, “Recently, the situation is improving, with the number of workers entering the factory gradually increasing.”
In Xi’an, there are factories 1 and 2 that produce Samsung Electronics’ NAND flash.
NAND flash is a memory semiconductor that retains data even when the power is turned off, and is used for data storage in smartphones, laptops, and data centers.
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The Xi’an plant accounts for 40% of Samsung’s NAND production and 10% of global NAND production.
In addition to Samsung, Micron, the world’s third-largest memory maker operating a semiconductor packaging plant in Xi’an, is currently experiencing production disruptions.
Global memory makers’ production cutbacks will inevitably affect the memory semiconductor market and global supply chain.
However, since memory semiconductor prices have recently been falling, many analyzes say that such a supply disruption is a good thing rather than a bad thing for manufacturers.
TrendForce, a Taiwanese market research firm, predicted that the average NAND flash price in the first quarter of this year would fall 10-15% compared to the previous quarter, but recently predicted that “the extent of the decline is likely to be smaller than expected” due to the blockade of Xi’an.
Lee Won-sik, a researcher at Korea Investment & Securities, said, “The recent blockade in Xi’an has caused supply disruptions for both DRAM and NAND.”
However, if the lockdown is longer than expected, it may face the worst situation in which the semiconductor production line stops due to logistics and manpower shortages.
When a semiconductor production line stops, all raw materials used must be discarded, and it takes more than two months to restart, which can cause tens of billions to hundreds of billions of won in damages to manufacturers.
In fact, at the beginning of last year, Samsung Electronics’ Austin, Texas, US factory was shut down for about a month and a half due to a cold wave, causing damage worth 300 billion to 400 billion won.
An industry official said, “The semiconductor production line can never be built,” but “it can become a problem if the lockdown is prolonged.”
A fire broke out on the 3rd of this month at the Berlin plant of Dutch equipment maker ASML. ASML is the exclusive producer of extreme ultraviolet (EUV) exposure equipment essential for semiconductor microprocessing, and Samsung Electronics and Taiwan’s TSMC are its main customers.
The scale of the fire is about 200 square meters (about 60 pyeong) out of the total plant area of 32,000 square meters, but it is said that the production area with some major equipment was also affected.
Currently, ASML is closing some of its factories and is working on a recovery plan.
Although ASML announced that “the fire will have a limited impact on production this year,” the semiconductor industry is concerned about the possibility of exacerbating the semiconductor supply shortage.
According to Bloomberg, if shipments decrease by 10% due to the fire, global EUV equipment supply will temporarily decrease by 8.4%.
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2022/01/09 06:01 Send