Micron Reports Power Disruption At Hiroshima Manufacturing Facility in Japan

Micron Technology, Inc. experienced a prolonged power disruption at its Hiroshima DRAM manufacturing facility on Friday, July 8, 2022, due to inclement weather in the area.

Micron Hitoshima

All Micron team members are safe.

The loss of power prompted the implementation of factory shutdown protocols. Operations have resumed at reduced levels and will continue to ramp over the next week. The manufacturer is assessing the wafers in process at the time of the incident to determine whether they will meet the company’s stringent quality standards.

Micron expects production output loss and associated cost impact from both productivity and wafer scrap across its 4FQ22 and 1FQ23.

It is currently assessing the impact to near-term supply and is working to utilize existing inventory and its remaining DRAM factory network to meet customers’ critical requirements.

Micron will update its customers directly as appropriate.

Comments

Micron's Japanese plant at Hiroshima suffered a power outage on July 8. According to TrendForce, Inc.'s investigations, this plant's monthly wafer starts accounts for approximately 30% of Micron's total monthly wafer starts in 3Q22.

In terms of global wafers starts, this plant's proportion of wafer starts is approximately 7%. The plant's primary production process is 1Z nm, accounting for more than 50% of capacity, followed by 1Y nm, accounting for nearly 35%. Although machinery initiated the uninterruptible power supply system when the outage occurred, due to the voltage drop, plant machinery required initialization and inspection. The power outage persisted for approximately 5~10mn and the effect on production capacity was limited.

This Micron plant is mainly a R&D center and the next-gen 1beta nm process will be prioritized for production at this location. Looking at its product categories, the plant primarily produces mobile DRAM related to smartphones at this stage. Weak global consumer electronics demand due to geopolitical conflicts and rising inflation since the beginning of the year has precipitated a high level of memory inventory among various manufacturers. The impact of the power outage on Micron's production capacity is relatively low and the company can also use its inventory to meet the needs clients, so there is no impact on the overall supply and demand in the DRAM market.

Analyst company has simultaneously observed that the spot market, which always responds immediately to market conditions, has not seen an increase in demand since the power outage nor is there a market response to customers' urgent orders. The power outage will not reverse the current oversupply of memory. TrendForce will maintain its original price forecast for 2H22, which means that DRAM prices will drop by approximately 10% in 3Q22.