Taiwan factory fault predicted to hit memory production and increase prices
Malfunction in factory set to decrease global production by five per cent
A malfunction in a Taiwanese factory is set to affect the global production of DRAM (dynamic random-access memory) and lead to further price increases, according to market watcher TrendForce.
Inotera, also known as Micron Technology Taiwan, has suspended one of its fabrication plants after the malfunction of its nitrogen gas dispensing system contaminated equipment in the facility, according to Trendforce, although Micron has since issued a statement playing down the incident.
TrendForce expects the impact of the fault will see the production of DRAM components go down by 5.5 per cent in July, triggering price increases for memory products.
The Taiwanese factory produces components for PC, server and mobile DRAM products, with Trendforce expecting the malfunction, along with already strained supply chains, to affect all sections of the market.
Vendors including HP Inc, HPE and Dell have all highlighted component shortages as a problem in recent months, while Gartner recently said that DRAM prices have doubled since last summer.
TrendForce said that buyers and suppliers are currently assessing the impact of the Taiwanese factory, with some already hinting that price hikes are on the horizon.
Last month Trendforce said that the average selling price of DRAM products would increase by five per cent in Q3 compared with Q2 as manufacturing technology migration slows.
In a statement issued to Reuters and quoted elsewhere since we published our initial report, Micron contradicted Trendforce's account of what happened, describing it as a minor incident.
"Regarding recent rumours about Micron's fabrication facility in Taoyuan, Taiwan, Micron hereby clarifies that there was no nitrogen leaking incident nor evacuating of personnel," the firm said. "There was indeed a minor facility event but operations are recovering speedily without material impact to the business."