Supply shortages and the resulting price increases could soon get much worse after contamination at Western Digital’s NAND production facilities sent millions of terabytes of flash storage down the drain.
Western Digital and Kioxia revealed this week that contaminated materials used in flash-memory chips ruined at least 6.5 exabytes, or more than 6.5 million terabytes, of storage. An analyst at Wells Fargo said that, when adding Kioxia’s losses, the total shortfall would be about 16 exabytes, that’s 10% of the total market consumption in the quarter.
Western Digital is one of the largest flash memory producers in the industry, and any halt in production could result in higher prices and further shortages at a time when chipmakers are struggling to keep up with increasing demand. Flash memory is a crucial component found in nearly every modern gadget, from smartphones and computers to digital cameras and modern cars.
“Flash memory prices will rise for sure, further adding fuel to the recent component price hike trend stemming from supply shortages,” said Ace Research Institute analyst Hideki Yasuda, according to Bloomberg.
Western Digital and Kioxia are some of the world’s leading SSD suppliers, and their joint production accounts for around 30% of the NAND flash market. The contamination could cause the price of NAND—the main component of SSDs—to increase by up to 10%, according to TrendForce’s market research. Such a substantial price hike could have a direct impact on the PC and tablet markets, just as laptop and desktop makers are refreshing products in the wake of new processors.
Though Western Digital is a major player in the space, several other giants should be capable of offsetting some of the production losses while taking advantage of their rival’s bad fortunes. Samsung and Micron will likely see increased demand for their flash storage solutions from companies needing to ramp up supply. iFixit teardowns show that Apple uses Kioxia NAND in many of its products (though some of its SSDs are supplied by Samsung) as does Google with its Pixel 6 smartphone. So far, it’s unclear whether this supply disruption will lead to price increases or recalls of those products.
Western Digital and Kioxia didn’t disclose the cause of the contamination or provide a timeline for when the plants in Yokkaichi and Kitakami would be fully operational again, only promising to bring them back up as quickly as possible.