DRAM prices up over 27% since China FAB fire

Prices are expected to continue to rise as SK Hynix works to repair FAB factory in Wuxi

The price of DRAM memory has been steadily climbing since a Sept. 4 fire heavily damaged parts of a major fabrication (FAB) facility in Wuxi, China.

The fire that damaged SK Hynix Semiconductor's FAB plant lasted almost two hours. The Wuxi facility accounts for 10% of the world's DRAM production and produces almost half of the 260,000 memory wafers Hynix makes every month, according to TrendForce.

The price of 2Gbit DRAM chips, commonly used in desktop and laptop memory modules, has passed the $2 mark, representing a 27.6% increase since the fire, said Avril Wu, an analyst at DRAMeXchange.

"Based on our current evaluation, this fire is going to impact supply sharply. Therefore, the price of both spot price and contract price is likely to keep going up," Wu said.

Further DRAM shortages would also restrict the amount of memory available for PCs, TrendForce said.

The fire at SK Hynix's fabrication plant in China could affect as much as 50% of its DRAM production, according to a a report from DRAMeXchange, a research division of TrendForce.

In response to a Computerworld inquiry earlier this week, SK Hynix said the area of the Wuxi FAB not effected by fire resumed operations on Saturday, Sept. 7. "We are continuing our inspection of utilities and equipment to restore the line that was partly damaged by the fire under the cooperation of the Chinese government," Hynix stated. "Further, we have dispatched many experts from our headquarters and established a 24 hour restoration system with partner companies."

Hynix said it plans to resume "normal operations" as quickly as possible by ramping up operations in stages as soon as the damaged equipment is replaced.

"We will continue to make every effort to minimize the impact on supply with our inventories of finished products and completely processed wafers as well as production support from our headquarters," it said.

Lucas Mearian covers storage, disaster recovery and business continuity, financial services infrastructure and health care IT for Computerworld. Follow Lucas on Twitter at @lucasmearian, or subscribe to Lucas's RSS feed . His email address is lmearian@computerworld.com.

Copyright © 2013 IDG Communications, Inc.

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