Earthquake Disrupts Micron's DRAM Production in Taiwan

(Image credit: Micron)

An earthquake hit Taiwan on Sunday disrupting production at multiple semiconductor fabrication facilities on the island. Micron has said that there were no casualties among its personnel, but it had to stop its Fab 11 near Taoyuan. Typically, disruptions in DRAM production lead to increases of memory prices on the spot market, yet it does not seem to be the case right now. Furthermore, Micron's rival Nanya says that the quake did not cause much trouble.

"Micron Technology confirmed that all team members in Taiwan are safe as a result of the 6.5 magnitude earthquake that struck north eastern Taiwan on October 24," a statement by Micron reads. "The earthquake caused impact to production at our facilities in Taoyuan. Micron is evaluating the impact and determining the appropriate steps to return to full production. 

Nanya, who also has a fab near Taoyuan has said that the earthquake did not cause any major troubles to its production facility. 

"As of October 25 morning, majority equipment have resumed to normal operation, and the rest of the equipment continues to be reactivated," a statement by Nanya reads. "The incident may slightly affect the monthly output in near term. The company has confirmed with its supply chain and subcontractors to ensure the continuity of production. The incident has no material impact on Nanya Technology's operation."

When an earthquake hits, fabs are automatically shut down. In most cases some wafers that are being processed at that moment get damaged and have to be scrapped, which comes at a cost. In some cases, fab equipment gets damaged and has to be repaired or replaced, which causes a more substantial financial impact. Restarting fabs takes quite some time as all tools have to be examined before going back to work, so Micron's fabs near Taoyuan will not operate at full capacity for days or in a worst-case scenario possibly weeks.

Located near Taoyuan City, Micron Technology Taiwan's Fab 11 is one of Micron's two major DRAM production facilities in the country. The other is situated near Taichung. Last year production capacity of Fab 11 was approximately 125,000 wafer starts per month, which at the time was a little less than 9% of the global DRAM supply.

Micron has been very aggressive in transitioning to advanced DRAM fabrication processes in the recent years and its DRAM bits supply growth was ahead of the industry, some analysts believe. Micron's fabs in Taiwan are state-of-the-art and use leading-edge nodes, so the impact caused by their disruption should be noticeable. Meanwhile, the company may have enough DRAM chips in stock to keep supplying its customers, which will diminish the impact of production disruption.

"Any meaningful production hit would most certainly lead to a much more tight supply environment and could pull in a DRAM pricing inflection sooner than current consensus expectations [for 1H 2022]," C.J. Muse, an analyst at Evercore ISI, wrote in a note to investors, reports Bloomberg.

Demand for computer memory is rather strong these days since demand for PCs and other electronics is on the rise, but demand for DRAM in Q4 is lower than in Q3. As a result, it is unlikely that supply disruptions by a major fab will cause any drastic effects. DRAM spot prices on DRAMeXchange did not increase any significantly on Monday and were down early on Tuesday.

Analysts from TrendForce believe that DRAM prices are expected to get lower next year as supply will exceed demand since all memory makers are deploying their latest fabrication processes that enable high bit densities causing oversupply. Based on their estimates, total DRAM bit supply is to increase by 17.9% year-over-year in 2022.

Anton Shilov
Freelance News Writer

Anton Shilov is a Freelance News Writer at Tom’s Hardware US. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

  • peachpuff
    Who cares about micron... how's tsmc doing?!?
  • JfromNucleon
    peachpuff said:
    Who cares about micron... how'd tsmc doing?!?
    Uhhh, everyone? DRAM is what's used for RAM and Storage devices (eMMC and SSDs)