LONDON – The earthquake that hit Japan on March 11 is set to reduce the global supply of NAND flash memory bits by less than 4 percent in the second quarter of 2011 and supply should return to normal thereafter, according to the DRAMexchange service provided by TrendForce Corp.
The analysis service said that the Yokkaichi wafer fabs owned by a Toshiba-SanDisk joint venture resumed production Friday (March 18) and that the expectation was that the supply of 300-mm diameter raw wafers would resume before Toshiba runs out of inventory.
DRAMexchange observed that contract prices for NAND flash usually decline in the second quarter and it argued that NAND flash memory prices will fall again after a mid-March spike although at a slightly slower rate than in previous years.
The panic buying that occurred after the news of the earthquake led to a 5 to 15 percent increase in the average selling price for contract prices for NAND flash, the firms said.
Numerous suppliers were in the worst affected area and even where damage is minimal rolling power black outs are a concern as these prevent the restarting of suppliers' factories. Of particular concern is the Shirakawa plant of Shin-Etsu Chemical, the leading supplier of 300-mm diameter wafers (see Report: 20% of global 300-mm wafer production down).
In a note DRAMexchange said that it is common for NAND flash makers to keep 6 to 8 weeks of wafer inventory. The implication of this is that if the Shirakawa plant can be up and running within one month the production of NAND flash memory ICs is unlikely to be affected.
The Yokkaichi NAND flash memory wafer fabs are located 500 miles from the epicenter of the earthquake and therefore only suffered mild shocks of magnitude 2 to 3, DRAMexchange said.
Production was "back to normal" on Friday (March 18). However, some work in progress was damaged and DRAMexchange estimates this will reduce the total Toshiba/SanDisk output by 10 percent in the first half of the second quarter of 2011. This equates to a reduction in the global NAND flash bit supply of less than 4 percent in 2Q11.
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