Fire at Kioxia 3D NAND Manufacturing Plant

TechNews, a Chinese provider of IT information, wrote (translation by Google Translate): “According to a customer’s notice from Kioxia, at 6:10 AM on January 7, 2020, a fire broke out at the Fab 6 factory in Yokkaichi, Mie Prefecture, Japan, although at Fab Plant the fire was quickly extinguished without causing any casualties. The cause of the fire and the damage to the production equipment of the factory are still under investigation and statistics. After the relevant damage statistics are completed, if the customer’s supply is affected, it will be notified immediately. From an official notice observation, market participants analyzed that although the fire was quickly extinguished, because the fire occurred in the factory’s cell less room, it may cause the cell less room to malfunction in the short term. It will affect the OEM or the supply of NAND flash in the channel market caused a lot of influence, and the price increase trend is more clear.”

Fab 6 makes 64-land 96-layer 3D NAND for Kioxia, formerly called Toshiba Memory, and Western Digital, and pumps out 3-4% of total world NAND production

There was no casualties for workers but one manufacturing equipment was partially damaged.

Remember that last June 15, a 13-minute power failure at the Yokkaichi fab jointly operated by Kioxia and WDC forced the two companies to reduce their NAND production, in turn halting the price drop of eMMC/UFS and SSD products in 3Q19. At that time, all the factories including Fab 2, Fab 3, Fab 4, Fab 5 and Fab 6 were affected, as well as the supply of the entire NAND flash supply chain for a whole season.

NAND flash prices recently finally rise as the demand is superior to the offer as supply remains tight.

This event could accelerate this trend even if Samsung announced that it will expand production in 2020. But it was also announced recently that Samsung’s Fab in Hwaseong, South Korea, suffers power outage and had to stop production of DRAM and V-NAND.

On the other side, it’s good news for the HDD industry that will have a better $/GB ratio. But it will not change current trends: 2.5-inch HDDs are progressively abandoned and no one of the only 3 HDD makers are pursuing the technology, being now exclusively focused on high-capacity units slower, but much more affordable for price per gigabyte compared to SSDs.