Samsung and Micron have strong presence in the Chinese city of Xi’an which is under lockdown due to a local outbreak of the Delta variant.
Samsung operates two memory fabs in Xi’an.
Samsung’s memory fabs in Xi’an are responsible for the manufacturing of high-layer count 3D NAND Flash products, and wafer inputs at the two fabs account for 42.5 percent of Samsung’s total NAND Flash production capacity and 15.3 percent of the global total.
“At the moment, the lockdown of the city is not expected to have a notable impact on these fabs operated by Samsung,” TrendForce said.
The municipal government has been authorized to enforce very severe restrictions on the movements of people and goods in and out of the city during this lockdown.
Samsung has finished arranging most of the memory product shipments for the period from the end of 2021 to middle of January next year. The company could face logistical issues related to the Xi’an lockdown in the near future and experience delays in shipments.
Samsung’s clients could have difficulties planning their procurement activities because deliveries of memory components are not in accordance with the originally set dates. The same logistical issues could cause delays in the deliveries of production-related materials to Samsung’s fabs in Xi’an. The fabs have sufficient inventory to continue normal production over the next several months.
Xi’an is a strategically important location for both Samsung’s NAND Flash production and Micron’s memory packaging and testing operations.
TrendForce’s investigations indicate that the lockdown will have no impact on Micron’s packaging and testing operations.
While memory packaging and testing capacities in Xi’an account for a relatively low share of the company total, the lockdown may potentially affect spot prices of DRAM products in the short run.
In terms of pricing, the spot price of NAND Flash has not fluctuated significantly due to the lockdown event. Both buyers and sellers hold significant inventory in the current spot market. Recent trading volume has been weak and price fluctuations have been small.
