Samsung, Micron warn, lockdown in China will affect memory chip manufacturing

Two of the world’s largest memory chip makers, Samsung Electronics and Micron Technology, have warned that their chip manufacturing base could be affected due to the COVID-19 lockdown in the Chinese city of Xian Xian. According to Reuters, Micron said on Wednesday that the lockdown could delay the supply of DRAM memory chips. This chip is extensively used in data centers. The company has said that due to the stringent restrictions that came into force earlier this month, the number of employees at the manufacturing site has come down. Samsung Electronics has said it is temporarily adjusting operations at its manufacturing plant in Xian. NAND flash memory chips are made in this center. They are used in data storage, data centers, smartphones and other gadgets.

Due to the increasing cases of Kovid-19, China has imposed strict restrictions on travel in Xian from 23 December. Due to this it has become difficult for people to move out. Similar restrictions have also been imposed in Beijing.

In a blog post, Micron said that the company is using its global supply chain, including its subcontractor partners, to help customers with DRAM products. The company estimates that it will be able to meet the demand of the customers. However, there may be a slight delay in activating the network.

Micron has said that it was working to reduce the risk of virus transmission. Measures like two yards distance were taken including on-site testing and the company was also encouraging the employees for vaccination.

At the same time, according to analysis provider TrendForce, Samsung has two production lines making advanced NAND flash products in Xian. Of all the NAND flash chips that Samsung manufactures, 42.5 percent of the production is in Xian, which is 15.3% of the total global production.

Analysts say chips made at Samsung’s Xian NAND plant will be shipped overseas and to the Chinese market with limited shipments. Large demand for chips from this plant will come from Chinese server companies.