Samsung and Micron warn China’s Xian lockdown could affect memory chip manufacturing

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Samsung Electronics and Micron Technology, two of the world’s largest memory chip manufacturers, warned that a COVID-19 lockdown in the Chinese city of Xian could affect their chip manufacturing facilities in the region.

Micron said Wednesday the lockdown could cause delays in the shipment of its DRAM memory chips, which are widely used in data centers.

The severe restrictions that went into effect earlier this month may have become increasingly difficult to mitigate and have resulted in reduced headcount at the manufacturing site.

Samsung Electronics also said on Wednesday that it will temporarily adjust operations at its Xian manufacturing facilities for NAND flash memory chips, which are used for data storage in data centers, smartphones and other tech devices.

Chinese officials, in line with Beijing’s drive to contain outbreaks immediately, have announced that starting Jan.

“We are tapping our global supply chain, including our subcontractors, to serve our customers for these DRAM products,” Micron said in a blog post.

“We expect these efforts will meet most of our customer demand, but there may be short-term delays in activating our network,” the company said.

Micron added that it was working to minimize the risk of virus transmission and was taking steps such as physical distancing and on-site testing and encouraging vaccination.

Samsung has two production lines in Xian that make advanced NAND flash products, which, according to analytics provider TrendForce, account for 42.5 percent of its total NAND flash memory production capacity and 15.3 percent of total global production capacity.

Seoul-based analysts said chips made at Samsung’s NAND Xian facility would enter the Chinese market primarily with limited shipments to overseas destinations, and some of the biggest demands for the type of chips the factory will make , would come from Chinese server companies.

Samsung said on a conference call in late October that the company entered the July-September quarter with low inventory of NAND chips and intended to normalize inventory during that quarter. The October-December earnings results are expected to be announced in January.

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