NAND flash fabs in Japan halt production to check for earthquake damage

[Shawn Knight]

Bottom line: Just as it seemed the NAND flash market was back on solid footing heading into 2024, disaster struck in the form of a 7.6 magnitude earthquake that rocked Japan on New Years Day. The impact of the disaster on the storage market could be felt for months to come.

Toshiba said it has been able to confirm that all employees who came to work that day at the Nomi City, Ishikawa Prefecture facility are safe although those that were out on vacation have not yet been contacted. Production has been halted as the company assesses damage to its infrastructure and production lines. Another update will be issued on January 5, we are told.

Toshiba was not the only one affected by the quake. According to TrendForce, several other industry players including Shin-Etsu and GlobalWafers' facilities in Niigata are offline while safety inspections are being conducted. The market research firm said the crystal growth process in raw wafer manufacturing is very sensitive to seismic activity; fortunately, most of Shin-Etsu's crystal grow houses are in the Fukushima region and were not directly impacted by the quake.

Three plants operated by TPSCo (a joint venture between Tower and Nuvoton) in Uozu, Tonami, and Arai have also halted production to check for damage. Others in the area, including Taiyo Yuden's Niigata plant, were designed to withstand seismic activity up to a level seven and thus experienced no equipment damage.

Natural disasters can have a devastating impact on the hardware supply chain. In 2011, Thailand experienced severe flooding that resulted in more than 800 deaths and crippled hard drive production. At the time, the region was responsible for nearly a quarter of the world's HDD production.

Damage at key factories forced production to halt for weeks and ultimately drove prices through the roof. At the peak, it was not uncommon to see drives selling for double what they had been going for just a few months earlier. Let's hope we don't end up back in that same boat again.

Image credit: Pixabay

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https://www.techspot.com/news/101398-nand-flash-fabs-japan-halt-production-check-earthquake.html

 

[Atmajaya2020]

My condolences for Japan and its citizen..
but this could be one of the reasons why the price of NAND will rise..

 

[yRaz]

My condolences for Japan and its citizen..
but this could be one of the reasons why the price of NAND will rise..

Maybe this could be one of the reasons we don't put critical infustructure in Japan? I thought the whole Fukushima thing was a lesson enough but what do I know? Maybe every fault zone on the ocean needs a nuclear power plant run on tech from the 1970s

 

[wujj123456]

Maybe this could be one of the reasons we don't put critical infustructure in Japan? I thought the whole Fukushima thing was a lesson enough but what do I know? Maybe every fault zone on the ocean needs a nuclear power plant run on tech from the 1970s

Agree on the nuclear plant part, but for this specific news, these are Japanese companies, not some outsourced manufacturing. Naturally a lot if not majority of their presence will be located in their own country...

 

[yRaz]

Agree on the nuclear plant part, but for this specific news, these are Japanese companies, not some outsourced manufacturing. Naturally a lot if not majority of their presence will be located in their own country...

Okay, well here is a business reason. Due to the extreme manufacturing tolerances in chip making even the small earthquakes that are a common occurrence in Japan reduce yields.

 

[Watzupken]

I don’t think earthquake is uncommon in Japan. If anything, it’s the opposite. So while there may be short run disruptions to supply, it should not result in a meaningful price increase. Unless of course, there are severe damage to infrastructure and to fabs and factories.

 

[godrilla]

Google search In Japan, the two companies jointly produce NAND flash memory chips, which are widely used in smartphones, personal computers and other devices to store digital data. Kioxia, Mitsubishi UFJ, Mizuho and the Development Bank of Japan declined to comment.Oct 19, 2023
source
Reuters

While this might not effect western markets initially it might eventually. Very unfortunate what happened there.

 

[Theinsanegamer]

Maybe this could be one of the reasons we don't put critical infustructure in Japan? I thought the whole Fukushima thing was a lesson enough but what do I know? Maybe every fault zone on the ocean needs a nuclear power plant run on tech from the 1970s

All the other nuke plants, including the one 30 minutes from fukushima, handled that disaster without incident. It was a specific combination of engineering failures and managerial incompetence that did fukushima in.

There is nowhere on earth that is immune to natural disasters. Earthquakes, tornado, hurricanes, droughts, everywhere has some type of problem. Designing facilities to handle issues in a local area is sufficient. As godrilla pointed out earthquakes are pretty common in japan, and these facilities are built with this issue in mind.

 

[Revolution 11]

Okay, well here is a business reason. Due to the extreme manufacturing tolerances in chip making even the small earthquakes that are a common occurrence in Japan reduce yields.

Ignoring the fact that all manufacturing plants in Japan are designed for moderate earthquakes in mind (major ones are too energetic to prevent all damage) so yields are normally not affected...

The loss in yields for rare events is not worth the loss of access to extremely skilled labor, proximity to other technologically advanced suppliers and industrial partners, and the cost of relocating production entirely and recreating the entire supply chain from scratch.

You will need a series of earthquakes every few months to damage the production to make the math work out for relocating production away from Japan.

It is just (very very) good business to keep making these products where they are currently. To do anything else would almost be a breach of fiduciary duty.

 

[LetTheWookieWin]

While I don’t doubt that this earthquake or the Thailand flooding years ago had impacts on production, these events do provide the semiconductor industry with convenient excuses to do what they’ve wanted to do anyway- I.e., drastically curtail production and jack up prices during times of oversupply. I’m not buying it.