Western Digital decides to raise flash memory prices due to raw material contamination

Flash-memory makers seem to have faced power outages, fires, and floods. Western Digital’s latest problem is the potential for contamination of raw materials. Earlier, we mentioned that the Yokkaichi and Kitakami factories in Japan jointly operated by Western Digital and Kioxia were contaminated with raw materials, and the factory has suspended the production of flash memory. At that time, Western Digital stated that the contaminated products may be as high as 6.5 exabytes, but this does not include Kioxia. If the contaminated products of Kioxia are added, it may reach more than 16 exabytes. Some analysts have predicted that the problem of raw material pollution from Western Digital and Kioxia may be transmitted to the terminal. Sure enough, Western Digital announced that the price of flash memory will increase.

Image: Western Digital

According to the official notice issued by Western Digital to partners, affected by the problem of raw material pollution, Western Digital decided to immediately increase the sales price of all flash memory products. As for the reason for the price increase, Western Digital said that the problem of raw material pollution caused the company’s cost to increase significantly in the short term, so it decided to increase the sales price of the product after evaluation. It is worth noting that the contaminated 3D flash memory, and all the flash memory mentioned in the Western Digital notice, means that the price of 2D flash memory will also increase.

The flash memory manufactured by Western Digital and Kioxia has a very high market share in the global market, and the contaminated 16EB products this time are equivalent to 10% of the consumption in 2022Q1. Now Western Digital has announced a price increase, which means that Kioxia will also increase the price of flash memory soon, and other brands are likely to follow suit and increase prices immediately. If the overall price of flash memory increases, it means that the price of related consumer goods will also increase, which is not limited to products such as solid-state drives and memory directly related to flash memory. Flash memory is also required for other consumer and even enterprise electronic products, such as smartphones, smart home devices, industrial Internet of Things, and other electronic products. In the end, this part of the price increase will still be passed on to consumers, and ordinary consumers will pay for it.