Sat, Aug 04, 2007 - Page 11 News List

Memory chip production halts at Samsung factory

AP , SEOUL

An electrical problem at a Samsung Electronics Co factory yesterday forced a partial halt in production at the world's largest memory chip maker, the company said, raising prospects of a global shortage.

A spark in an electrical transformer led to a power failure on six chip-making lines at a plant near Seoul, spokeswoman Lee Soo-jeong said. Five of the lines make memory chips and one makes chips for other functions, he said.

Samsung is the world's largest producer of memory chips for use in computers, digital music players and other devices.

Analysts said the suspension of Samsung's chip lines could lead to a severe shortage of NAND flash memory chips, which are able to retain data even when they are unpowered. Samsung's misfortune could give a boost to its South Korean rival Hynix Semiconductor Inc and Japan's Toshiba Corp.

"It will take at least one month to begin production again at these lines," said CW Chung, a Lehman Brothers analyst in Seoul. "This news would be negative for Samsung but positive for the overall memory market, particularly for NAND flash."

Most of the Samsung lines affected by the power outage produce NAND flash memory chips, Chung said.

"The global NAND market is already in short supply. The trouble at Samsung will exacerbate the shortage situation, pushing up NAND chip prices," he said.

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