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Power outage disrupts Hynix DRAM production

Posted: 22 May 2008 ?? ?Print Version ?Bookmark and Share

Keywords:DRAM? 300mm foundry? power disruption?

South Korea's Hynix Semiconductor Inc. May 20 said it was hit by a power outage at its 300mm fab in Chinaan event that has disrupted the company's DRAM production, according to Reuters.

The Wuxi-based plant is said to represent ''about half'' of Hynix's total DRAM production, according to the report. The outage could reportedly result in $16 million to $18 million in lost sales.

''This power outage is not related to the earthquake in Sichuan,'' said Avi Cohen, head of research at Avian Securities LLC, in a report.

''Such shutdowns typically cause short term disruptions and a slight bump in pricing as dealers concerned about availability rush to the spot marker to secure additional product,'' Cohen said. ''Longer-term impact of this power outage is likely to be minimal as the market is still in an oversupply environment and that we have not yet started the build for back to school.''

This is not the first power outage in the industry. ''Recall that Samsung had a similar outage last August in one of its NAND fabs which initially caused a spike in NAND prices but has little affect on the supply/demand dynamics beyond the month,'' he said. ''Nevertheless, expect the DRAM players to bounce this morning on this news.''

At the same time, DRAM pricing continues to increase. ''In our talks with DRAM module makers and producers in Taiwan, we have come to believe that the current stabilization in the DRAM market will continue in the next couple months,'' said Daniel Amir, an analyst at Lazard Capital Markets, in a report.

''Industry contacts are suggesting a 5-10 percent increase in [DRAM prices] the second half of May followed by [about a 5 percent] increase in both the first and second half of June,'' Amir said. ''The consensus is that the DRAM market in 2H 08 will be fairly stable, as supply and demand will be balanced.''

Meanwhile, Hynix has been in the headlines in recent weeks. The company recently licensed its 50nm, stack-capacitor DRAM process technology to Taiwan's ProMOS.

Recently, Hynix planned to move into NAND production in a new 300mm fab in South Korea, dubbed M11. Hynix will push out that production to Q3 from Q2, according to reports. Hynix will shut down another NAND fab, M9, in Q3 in a move to reduce output, according to reports.

- Mark LaPedus
EE Times





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