What just happened? Samsung has confirmed it will be adjusting operations at its semiconductor manufacturing facility in Xian after the entire Chinese city was put under lockdown following a surge in Covid-19 cases. The company says customers should not be affected, but there are concerns over the potential impact on global NAND supplies and prices if restrictions stay in place longer than expected.

CNN writes that Xian's 13 million residents were placed under a strict lockdown last week that saw schools, public venues, and transportation closed, leaving only essential services like supermarkets and hospitals open. Residents were banned from leaving their homes except for urgent reasons such as medical emergencies.

The situation is affecting Samsung's NAND flash memory plants in Xian, forcing the company to adjust operations, writes The Korean Economic Daily. The decision "was made in accordance with our commitment to protecting the health and safety of our employees and partners, which remains our top priority," Samsung said in a statement.

"We will also take all necessary measures, including leveraging our global manufacturing network, to ensure that our customers are not affected."

The two Samsung facilities, which employ over 3,300 people, process a combined 250,000 wafer sheets per month, accounting for 42.5% of Samsung's NAND production globally and 15.3% of the total global NAND output.

The good news is that Samsung, the world's largest NAND producer with a 34.5% market share, has enough stock to supply customers until the middle of next month.

Micron, which has manufacturing facilities in the city, is also feeling the strain of the Xian lockdown. It says that staff and contractor reductions have impacted output levels of DRAM assembly and test operations.

"We are tapping our global supply chain, including our subcontractor partners, to help service our customers for these DRAM products. We project that these efforts will allow us to meet most of our customer demand, however there may be some near-term delays as we activate our network," Micron writes.

It appears that there will be little impact on the price of NAND and DRAM consumer goods, and the local government expects restrictions to loosen within one to two weeks. But Samsung and Micron will undoubtedly hope that the lockdown doesn't last longer than planned, especially given the current global chip shortage.