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Micron: Xi'an Lockdown Will Delay DRAM Deliveries

Micron
(Image credit: Micron)

Micron said late Wednesday that the lockdown in Xi'an, China, would delay some of its DRAM supply in the near-term future, which might affect the spot pricing of some memory products. To comply with the requirements of local authorities, Micron had to reduce the workforce at its Xi'an site. As a result, to meet immediate demand from its clients, it has to either move operations to its other facilities or outsource them. 

Micron does not have any semiconductor production facilities in Xi'an. It makes DRAM in Japan and Taiwan while it manufactures NAND flash in Singapore. However, it performs its DRAM assembly and test operations in China (then those chips are used for some of the best memory modules available today). Since the company had to reduce the staff working at its factory to adhere to the requirements of local authorities, the facility cannot operate at full capacity. Hence, the memory maker cannot process all the DRAM wafers that it already has, which will delay the delivery of some orders.  

Another problem Micron faces is that its suppliers in the region have the same lockdown-related issues, so it might not get all the supplies it needs in time. 

"The city's closure has reduced Micron's team member and contractor workforce at our Xi'an site, resulting in some impact to output levels of our DRAM assembly and test operations there," a statement by Micron reads. "We are working with suppliers operating in this region that face similar challenges. We are also working with local government officials to identify solutions that will enable us to minimize impact of the situation and maintain operations at the site safely. We are tapping our global supply chain, including our subcontractor partners, to help service our customers for these DRAM products." 

Micron's actions come at the heels of Samsung's cutting NAND flash output at its fabs in Xi'an. 

(Image credit: Micron)

For now, Micron believes that its efforts would enable it to "meet most of" its customer's demand, yet it says that there may be some delays as it transits assembly and test operations to other facilities. Yet, if restrictions get more rigorous, it will be considerably harder for Micron to lessen the impact. 

"New or more stringent restrictions impacting our operations in Xi'an may be increasingly difficult to mitigate," Micron said. 

At this point, neither Micron nor Xi'an authorities can say when the lockdown and restrictions will be lifted, so the impact on Micron's DRAM output may turn out to be more severe. As a result, DRAM pricing could increase. 

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.