Micron's Fab Goes Offline for One Hour, DRAM Prices Go Up

One of Micron's fabs in Taiwan went offline on Thursday, which startled the market and sent memory spot prices upwards due to supply uncertainty. As a result, while the impact of the disruption is unclear, Micron's stock upticked. The fab typically pumps out approximately 8.8% of the global DRAM supply. 

Micron's Fab 11, located near Taoyuan City, was taken offline by an unexpected power outage that lasted for a little over an hour. According to United News, the factory immediately activated its safety mechanisms and procedures to avoid casualties and minimize losses. After the power supply resumed, the factory restarted, and the company is now assessing the consequences of the outage.

Micron Technology Taiwan's fab near Taoyuan — which used to belong to Inotera, a DRAM maker that Micron took over several years ago — is one of Micron's two major DRAM production facilities in Taiwan. The other one is located near Taichung.  

Production capacity of Micron's Fab 11 near Taoyuan is about 125,000 wafer starts per month, which represents about 8.8% of the global DRAM supply, reports United News citing TrendForce. The production facility mostly makes DDR4 and LPDDR4 memory using 10 nm-class process technologies.

Large production facilities have various fail-safe mechanisms to minimize production loss because of power outages that happen in Taiwan fairly often, largely due to earthquakes. Meanwhile, it is almost inevitable that some wafers get damaged by outages and have to be scrapped, which affects supply. Typically, there are thousands of wafers processed at a fab at the same time. Nowadays, DRAM production cycles can span for up to 2.5 months, so the outage affected wafers that were in different stages of production.  

It should be noted that restarting production tools at a semiconductor fab takes a long time even if they are undamaged, affecting DRAM output. Obviously, production equipment that sits idle generates losses for its owner. The good news is that Micron believes that it's Fab 11 can return to normal operation in a matter of days, the company told us:

“Micron experienced a power outage at its DRAM fabrication facilities in Taoyuan, Taiwan, on Thursday, Dec. 3,” the statement by the company reads. “Our emergency response procedures were implemented immediately, and all team members are safe. The power has been restored, and all the facility systems are operating normally. We estimate that the fab will return to normal production within the next few days.”

Meanwhile, the development is good news for memory makers. Because of supply uncertainties, spot DRAM prices increased on Thursday, which is a positive factor for all memory makers. Therefore, as reported by SeekingAlpha, Micron's shares jumped on the report.