Operations at two Japanese factories producing flash memory chips have been disrupted by the contamination of industrial materials, chipmaker Kioxia Corp said yesterday.
It comes as the tech industry grapples with a global semiconductor shortage that has hampered the manufacturing of numerous products from vehicles to gaming consoles.
Kioxia said that it suspected the “contamination of materials used in the manufacturing processes” at its production facilities leading to operations being partially suspended, without giving further details.
The company, a spin-off of Japanese conglomerate Toshiba Corp, said it was working to restore full output at the factories in central and northern Japan as soon as possible.
Kioxia’s US-based partner, Western Digital Corp, also confirmed the disruption and estimated that it would cause “a reduction of flash availability of at least 6.5 exabytes” at the plants, which are run by the two companies as a joint venture.
A unit of digital data, there are 1 billion gigabytes in an exabyte.
The type of memory chips affected is called NAND flash chips. They are different from the semiconductors currently in short supply worldwide, which use older technology.
“If this creates a shortage, then prices will rise,” said Jim Handy, a semiconductor industry expert at Objective Analysis.
Two factories being affected “implies that a supplier shipped bad chemicals” to Kioxia, he said.
“Other NAND flash makers are likely to purchase materials from the same supplier, so this could be a big issue,” he added.
Kioxia, together with Western Digital, holds a 35 percent market share of the global flash memory industry, its Web site said.
Ace Research Institute analyst Hideki Yasuda told Bloomberg News that the disruption could increase flash memory prices, “further adding fuel to the recent component price hike trend stemming from supply shortages.”
Separately, Sumco Corp, a key supplier of silicon wafers for the semiconductor industry, said that it has sold out its production capacity through 2026, a sign that shortages in the industry might not abate for years.
The Japanese company has orders to cover all output of its 300mm wafers for the next five years, it said after reporting earnings on Wednesday.
It is not taking such long-term orders for 150mm and 200mm wafers, but demand is likely to keep surpassing supply for years to come, the company said.
The price of wafers rose by 10 percent last year over the previous year and Sumco expects to see increases continue until at least 2024.
The company said that it could not expand production this year, despite robust demand from customers desperate for long-term supplies.
The company has done what it can in terms of optimizing existing production lines, and its supply-demand imbalance is consistent across its full range of products, Sumco added.
Additional reporting by Bloomberg
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