Major Fire Damages Wear Down SK Hynix's Wafer Plant
Published on: 13th Sep 2013
Note -- this news article is more than a year old.
According to DRAMeXchange the fire accident experienced by SK Hynix's Wuxi Plant on September 4 is now revealed to have originated from its Chemical Vapor Deposition (CVD) machinery. Other than the severely burned down equipments the fire heavy smoke and power shortages are known to have also contributed to the direct contamination of the clean room and the notably damaged wafer production lines.
Luckily, SK Hynix's Wuxi Plant is based on a special "Gemini" architecture, one which enables the clean room and other important facilities to operate independently. Under such a design, even when a major accident hits an area, a plant would still be able to maintain at least 50 percent of its total production capacity.
While SK Hynix is believed to have preserved half of its Wuxi Plant production, a number of its important facility regions are reportedly still heavily worn down from the smoke. The date for when the final rebuilding procedures will take place, as such, remains highly uncertain. With the fire originating from within the clean room, the difficulty of recovering the affected half of the capacity in the short term -- assuming both the equipment and clean rooms were heavily damaged -- are also relatively high.
Sources with close knowledge of semiconductor equipments have so far indicated that the recovery process could take as long as three months to half a year to complete.
To facilitate the entire process, SK Hynix has sent up to hundreds of professionals and engineers to visit the accident site and to assess the situation more carefully. Once the damages to the Wuxi Plant have been clarified, the DRAM industry is projected to be in for a series of major challenges.
Samsung and Micron to Benefit
The fire damages experienced by the Wuxi plant's WIP and the inconveniences caused by the power loss and contamination are expected to lead to a number of problems in the short term.
Even if production temporarily resumes, the implementation of various of the necessary clean up procedures, the close examination of the clean room, the re-inspection of the machineries, and the reconfiguration of various manufacturing settings are all expected to restrict the total number of wafers produced. The WIP reconfiguration and manufacturing delays, in particular, will likely impact at least two months' -- or roughly 260K's -- worth of wafer production.
With PC DRAM appearing to be the most affected product line from the fire, the DRAM spot prices are unquestionably also going to be affected.
Looking at the pricing market, the spot prices have up to this point managed to rise by an estimated higher than 20%. The module houses and vendors in the spot market have all started to supply products in small quantities, and, following the news of a possible price surge, are awaiting further development.
Looking over to the contract market, the PC-OEMs have sent a number of personnel over to both SK Hynix's head quarters and the Wuxi plant in order to clarify the full extent of the fire damages. Some of the OEMs are even seeking help from first tier module houses and Taiwanese DRAM manufacturers to ensure their future supply can be secured. In the event that proper action is not taken, a tightening of the inventory could happen as soon as Q4 of this year.
A price surge in the DRAM market, additionally, could also become inevitable. TrendForce believes Samsung and Micron will be the biggest beneficiaries of the current situation with SK Hynix, and that the growth and decline of the three major DRAM manufacturers will be considerably affected in the periods to come.
Tags: sk hynix