Lock-down of Xian City Begins to Affect Samsung's Fab Operation

The lockdown of Xian City in China will likely have an impact on price trends of Nand flash memory chips, as it is now forcing Samsung Electronics, the world’s largest memory chip maker to flexibly adjust the operation of its Xian, China wafer fabrication facility.  

Samsung Electronics said on Dec. 30 that its Xian China wafer fab operation is adjusting very flexibly in accordance with the proliferation speed of the Covid-19 pandemic in the city of Xian.  

The Xian, China wafer fab is mainly producing 3D Nand flash memory chips, making up about 40% of Samsung’s total NNAD memory chip production.

Home to Samsung’s China wafer fab operation, Xian City is now under siege, as the city government has locked down the whole city areas since Dc. 23, not only banning its 13 million population from walking out of home, but also ordering all schools, offices and restaurants to show down their operation.

The week-long lockdown has been blocking daily supplies of necessities, labor force, and even raw materials to support the operation and maintenance of the fab utility system, forcing Samsung to ultimately consider cutting back the production of Nand flash memory chips.

Armed with a fleet of robotics and other factory automation system, the Xian fab’s clean room operation is 100% automated, staying still immune from the lockdown. Yet, its UT or utility back-up system like gas, electricity and water supplies, HVAC (heating, ventilation, air-conditioning), and wastes treatments are mostly being operated manually by UT work force.

The operation cutback will likely help ease down the downward spiral of NAND flash memory chips, which are forecast to drop in the range of 10% to 15% in the fourth quarter of 2021, according to market research firm TrendForce.