Samsung announces suspension of operations at Xi’an fab, China
With the emergence of a new round of the COVID-19 epidemic in Xi’an, China, the epidemic prevention situation has gradually become severe, and the local area has begun to adopt more stringent epidemic prevention measures. Some companies have begun to switch to telecommuting, and some factories may need to suspend operations. Among them, Samsung’s two large wafer fabs in Xi’an have also been affected.
Samsung announced that due to the ongoing local epidemic, it will adjust the operation of its Xi’an plant. It is understood that these factories have entered a state of emergency on December 24, and are currently considering allowing key employees to stay in the factories to reduce contact with the outside world. Samsung said it will take all necessary measures, including the use of a global manufacturing network, to ensure that customers will not be affected.
Samsung’s two fabs in Xi’an mainly manufacture 3D NAND flash memory, which accounts for more than 40% of Samsung’s NAND flash memory production capacity and more than 15% of the global production capacity. The fab in Xi’an is Samsung’s second overseas investment in the construction of semiconductor facilities since it invested in a project in Austin, USA. It is the largest investment project in the history of Samsung Electronics’ overseas investment.
In addition to Samsung, Xi’an also has semiconductor facilities such as PTI (DRAM packaging) and Micron (chip testing). It is not clear how much it will be affected. According to TrendForce’s forecast, the average global NAND flash memory price will fall by 10%-15% in the first quarter of 2022. If relevant measures are effective, Samsung can ensure that sufficient inventory is prepared in mid-January next year, and the final impact will be relatively limited.
