A huge fire at the memory chips manufacturer Hynix SK’s factory in China earlier in September is to push up the price of DRAM until around December as less products become available on the market. Hynix, which accounted for 30% of the DDR memory chip market in the second quarter of 2013 and is the second largest manufacturer of memory chips in the world, had been experienced great sales and growth figures before the fire, and now with less products being made available due to a halt in manufacturing, DRAM prices have surged by more than 40% in recent days.
Panic buying is also contributing to the slight shortage, with brands buying RAM memory in bulk in the immediate aftermath of the fire, then profiting off the back of it as prices rice. With Christmas on the way too, and millions more people looking to purchase new memory or new computers, the memory chips will be in high demand over the next few months.
Justin Briere, of US Apple and PC memory supplier Data Memory systems, says, “The predicted price rises for certain memory chips should not affect the market too much on the long term, and prices are expected to go back to normal after the festive period. The fire in China was on a large scale, but the recent news is that production is set to resume next month, so any shortage which occurred would only be for a very short time.”
The seriousness of the fire has meant that almost irreversible damage has been done to make of the technologically advanced machinery within the factory, which were responsible for producing chips and silicon that are so minute they need to be measured in nanometres. The precise science also needs a hygienic environment, and the smoke and assorted chemicals from the fire have put the factory out of production for some time. In the meantime, Hynix has boosted production as much as possible in its other factories in the area in order to attempt to make up some lost ground.
The accident is similar to the huge floods which took place in Thailand in 2011, which had a knock-on effect on the price of computer hard drives across the globe. It is thought that the Hynix factory, though it will be closed for a much shorter time than many of the factories which closed in 2011, will have similar repercussions when it comes to DDR and flash memory.
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