Kioxia Corp, the production partner of Western Digital, has denoted several contaminated materials in two of its Japan-based plants: Yokkaichi and Kitakami. The contamination has led to the dwindling supply of computer chips and reduced Western Digital's potential output of products by a large margin.
It's unclear how drastic the issue is specifically, but Western Digital has alluded to a potential number of about 6.5 million terabytes in flash storage being completely ruined. According to a Wells Fargo analyst Aaron Rakers, Western Digital and Kioxia combined may well add up to around 16 total exabytes lost.
While Western Digital is among the dominant players in flash memory production, Samsung, on the other hand, is the powerhouse in this field. It will surely see ample business as Kioxia and Western Digital attempt to stamp out the contamination in both Japanese plants as swiftly as possible. It's unclear how long exactly the clean-up and restoration may take, potentially up to nearly four months, depending on how severe said issues are.
The setback only adds fuel to the ever-burning fire of chip shortage and supply chain mishaps. As among the most integral components in everything from PCs to cell phones, flash memory is a necessary resource in the production of myriad electronic devices. The Western Digital contamination will only lead to the ascension in flash memory prices and potentially other products necessitating the component.
Hideki Yasuda of the Ace Research Institute relays to Bloomberg, "Flash memory prices will rise for sure, further adding fuel to the recent component price hike trend stemming from supply shortages."
Kioxia, however, remains somewhat positive on the manufacturing ordeal. The company highlights that only the more enhanced and up-to-date form of 3D flash took a heavy blow from the contamination, depleting around half of the production, allowing its 2D NAND flash memory to remain in full swing.
The limited supply and derailing of production may not be felt immediately, as Kioxia will be utilizing what's left in its inventory to meet surging demand for the meantime. It's the "near term" that Kioxia sees the deathblow arising, as fewer manufacturing measures allow for inventory to remain stacked.
The Western Digital news saw burgeoning stock prices for Micron, a rival semiconductor producer, and SK Hynix, a South Korean chipmaker, at a 2% and 2.8% rise. At the time of writing, Western Digital stock remains optimistic despite the poor showing, though it will undoubtedly begin to tumble after trading hours.
Demand will only steadily increase and jack up prices long term. It's best to pick up any Western Digital SSDs or other memory cards now before MSRP starts to take a hit and products become ever-limited.
