Things aren't looking so rosy over at Samsung's NAND flash fabs in Xi'an, China. Yesterday, we reported that the facility was placed under lockdown due to a surge in COVID-19 cases within the city. Samsung operates two NAND fabs within the city, the first of which began operations in 2014, while the second came online in early 2020. Combined, they represent 42% of the company's flash output. Samsung initially said that it planned to run the fabs at normal production levels, but now says that it is making changes at its fabs to comply with the government's COVID-19 restrictions. That means the curtailed supply could affect the best SSDs that we all know and love.
"We have decided to temporarily adjust operations at our manufacturing facilities in Xi'an, China," Samsung confirmed in a statement. "This decision was made in accordance with our commitment to protecting the health and safety of our employees and partners, which remains our top priority." Unfortunately, Samsung is vague about how heavily its operations will be affected.
The company went on to say that it would shift production to other facilities around the globe to make up for any shortfalls resulting from Xian shutdowns. According to Samsung, these temporary measures will not affect customers. While that is somewhat comforting phrasing from Samsung, the reality is that Xi'an accounts for over 40 percent of the company's NAND flash production. And according to TrendForce, Samsung has captured 15 percent of overall global NAND flash production.
In addition, Xi'an fabs are responsible for Samsung’s high-layer-count V-NAND flash devices (up to 136 layers with the 980 Pro). So naturally, the fabs are also pumping out next-generation 176-layer V-NAND for future PCIe 4.0 and PCIe 5.0 SSDs. Samsung also says it is already sampling eighth-generation V-NAND with 200+ layers, with future aspirations targeting over 1,000 layers.
Unfortunately, Samsung doesn’t know how long its production will be affected by the Xi'an closures, so making any predictions about how the global supply chain is limited at this point.
Samsung initially indicated that the fabs would continue to run at full capacity during the lockdown, leading TrendForce to say late last week that “the lockdown of the city is not expected to have a notable impact on these fabs.” It's unclear how TrendForce's assessment will change now that Samsung has acknowledged it will curtail some production. We'll update as we learn more.