Update 2/10/2022, 3am PT: Analyst firm TrendForce has now reported that the incident could cause NAND flash prices to spike 5 to 10% in Q2, which will ultimately impact SSD pricing. We've added more information below:
Kioxia (formerly Toshiba) and Western Digital have reported that unspecified contamination issues have impacted several of their joint NAND production factories. Western Digital says the problems impact up to 6.5 exabytes of flash memory, but Kioxia has yet to give an estimate of the impact. Given the severity of the disruptions, TrendForce predicts a 5 to 10% price increase for flash in the second quarter of this year, ultimately impacting SSD and NAND flash-based products. However, this prediction only accounts for Western Digital's lost production capacity and could increase when Kioxia releases firm estimates of the impact on its own production.
Kioxia and Western Digital operate several NAND production factories as part of their 20-year-old joint venture. However, two of those plants, the Yokkaichi and Kiakami factories in Japan, have apparently ceased production due to the contamination.
Kioxia's statement says the issue impacts the production of its 3D BiCS flash, a product used in a wide range of SSDs and other products, but 2D flash production is not impacted. The company hopes for an "early recovery to normal operation," indicating that production has been halted. However, Kioxia did not indicate how much of its production capacity has been impacted.
Western Digital's statement provides a bit more detail, saying that the issue will reduce its production by "at least" 6.5 exabytes. Unfortunately, neither company has given a firm timeline of when production will be fully restored. However, given the long cycle times for 3D NAND flash (it can take two to three months to manufacture a 3D flash chip), any disruption will still have an impact for several months after production restarts.
We reached out to Western Digital, but the company has declined to provide any further details. We are also waiting for further clarification from Kioxia. As such, it isn't clear if any of the contaminated NAND has already shipped in products, which would eventually lead to recalls.
According to TrendForce, Western Digital and Kioxia account for 32.5% of the overall NAND flash market output, and this incident impacts 13% of the Q1 output. Western Digital is the leading supplier of both SSDs and eMMC products, so we can expect those to be the most impacted.
The Kioxia and Western Digital shutdowns come on the heels of Samsung's recent plant shutdowns due to Covid restrictions, all of which could ultimately lead to price hikes for NAND-based products, like SSDs and other flash memory devices.
For perspective, according to TrendFocus, the cumulative capacity shipped for both consumer and enterprise SSDs in 2021 weighed in at 207 exabytes spread over roughly 333 million SSDs. The Yokkaichi site has six factories and spans 694,000 meters with 6,300 employees. The Kitakami site consists of several factories, with a new K2 manufacturing facility under construction that will add an additional 136,000 square meters of production space.
We'll update you as more details become available.