Micron: Taiwan Drought Is Over, but More Problems Incoming

(Image credit: Micron)

Production of chips and display panels in Taiwan was affected by drought this spring, which is why Micron, TSMC, UMC, and other chipmakers even had to truck in water to prevent their fabs from stopping. But Micron says that the Taiwanese drought is over and there are now less risks for chip production. Meanwhile, the outbreak of SARS CoV-2 in in Asia is now a new problem that Micron has to face.

"We successfully mitigated the impacts of the drought in Taiwan with no reduction in our production output," Sanjay Mehrotra, president and CEO of Micron, said on an earnings call with analysts and investors. "Taiwan’s rainy season has begun, bringing with it sufficient water supply to support our manufacturing requirements.

The drought in Taiwan was a significant factor that this spring, but it looks like it did not really affect Micron as well as other makers of semiconductors in Taiwan due to the emergency measures they took. Yet, the rise of COVID-19 cases in India, Malaysia and Taiwan, is a new risk since if governments of these countries decide to impose lockdowns, which drastically affect supply chains and business.

Micron produces DRAM chips in Taiwan and 3D NAND chips in Singapore. It has test, packaging, and assembly operations in Malaysia as well as R&D facilities in India. In fact, the company already had to reduce output of its Malaysia plans to protect workers.

"While the drought in Taiwan is behind us, the rise in COVID-19 cases in Malaysia, India, and Taiwan are a risk to our manufacturing operations and R&D activities in these regions..." said Mehrotra. "In order to protect Micron team members at our Muar, Malaysia, back-end facility, we temporarily reduced our on-site workforce early in FQ4, which reduced output levels. We have since started bringing back team members to the site... While we ramp back toward full production levels in Muar, we will utilize our global supply chain… to meet our customer commitments and minimize any disruption to delivery schedules."

While the situation with COVID-19 cases seems to be a short-term issue, generally high demand for chips as well as insufficient supply will affect availability of 3D NAND and DRAM in the coming quarters. The head of Micron says that the industry will barely meet demand for chips for quarters to come. 

"We expect DRAM and NAND supply to remain tight into CY22 as the global economy rebounds," said Mehrotra. "The strong demand for memory and storage across the data center, intelligent edge and user devices puts Micron in the best position ever to fully capitalize on these exciting opportunities."

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.