Market Intelligence
February 10, 2022

NAND Flash Production Line Contaminations Expected to Impact Pricing in Q2

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Western Digital Corp. (WD) released a statement on Feb. 9, 2022, announcing an unidentified material has contaminated its NAND Flash production lines. The incidents occurred at the end of January at its Yokkaichi and Kitakami factories in Japan. Both factories are operated by WD’s joint venture partner, Kioxia. Upon discovery, the production lines were shut down, and there is no indication of when operations will resume at full capacity.

The incident is anticipated to cause a shortage of 6.5 exabytes in flash storage, which according to The Wall Street Journal, is equivalent to 100 million of its 64 GB flash memory cards typically used for digital cameras.

This creates added pressure to memory-chip makers following the sector’s previous manufacturing disruptions. In late December, Samsung Electronics and Micron Technology operations were suspended amid government-mandated COVID-19 lockdowns in Xi’an, China. The restrictions at the Samsung and Micron facilities were lifted in late January; however, it’s uncertain how the manufacturers’ NAND flash and DRAM output were affected. Coincidentally, the incident at the WD/Kioxia factories in Japan first occurred as the other two factories were resuming production.

The production line contamination combined with the existing memory market setbacks is anticipated to push NAND Flash pricing up by 5-10% in Q2. Additionally, WD and Kioxia manufacture PC client SSDs and eMMC products. Supply for these markets is likely to be affected as well.

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