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Xi’An’s Pandemic Lockdown Impacted Global Chip Supply

Well-known Chinese news site Sohu (NASDAQ: SOHU) recently reported that globalization demonstrated its power when a critical supply chain like the one for chip supply got impacted by lockdown policies in the Chinese city of Xi’An. Samsung issued an announcement on December 29 that its Xi’An manufacturing factories’ schedule had to be adjusted for the protection of the health of the employees due to the breakout of Covid in the city. Samsung has two large scale 3D NAND factories in Xi’An, which hold 42.3 percent of Samsung’s capacity, or 15.3 percent of the global supply. Samsung warned about the significant reduction of its output and stopped offering NAND quotes. Samsung is the world’s largest NAND Flash provider with a global market share of 34 percent. At the same time, Xi’An also has Micron’s DRAM memory packaging and testing plant. Micron is the world’s third largest DRAM chip manufacturer. The company said the factory is seeing manufacturing delays due to a lack of labor; as a result, new supply arrangements may be delayed accordingly. The Micron factory is currently running at 40 to 50 percent of its capacity. All these will cause the global short-term supply of storage semiconductors to face uncertainty.

Source: Sohu, December 30, 2021