DRAM-Memory-Plant

DRAM Memory – Micron’s Gas Problem


DRAM MEMORY

Micron's Gassy Problem



DRAM MEMORY

Micron's Gassy Problem


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Reading Time: 4 mins, 17 sec
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Reading Time: 4 mins, 17 sec
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ADDITIONAL MEMORY CONSTRAINTS:   Equipment malfunctioned at a Taiwanese Micron fab in March (2018) that further disrupted the manufacturing of several chip types ― adding increased pressure to an existing shortage.


The Micron Memory fabrication plant in Taiwan primarily produces PC DRAM, server DRAM, low-power DDR4 DRAM and graphics DRAM chips ― all products currently affected by allocations, factory constraints, and tight distribution.

ADDITIONAL MEMORY CONSTRAINTS:   Equipment malfunctioned at a Taiwanese Micron fab in March (2018) that further disrupted the manufacturing of several chip types ― adding increased pressure to an existing shortage.


The Micron Memory fabrication plant in Taiwan primarily produces PC DRAM, server DRAM, low-power DDR4 DRAM and graphics DRAM chips ― all products currently affected by allocations, factory constraints, and tight distribution.

What Happened ...this time?


What Happened ...this time?

In late March, an all-too-familiar problem arose at Micron's Taiwan-based memory plant (previously owned by “Rexchip”), where a gas generation system malfunctioned.

Micron-DRAM-Memory-Nitrogen

Image:  Nitrogen Used for Equipment Cooling


Micron noted that its production facility ― Micron Memory Taiwan ― experienced an interruption of nitrogen gas distribution. As a result, the plant disturbance is expected to last until the first half of April.


Micron-DRAM-Memory-Tanks

Image:  OEM Nitrogen Tanks


In late March, an all-too-familiar problem arose at Micron's Taiwan-based memory plant (previously owned by “Rexchip”), where a gas generation system malfunctioned.

Micron-DRAM-Memory-Nitrogen

Image:  Nitrogen Used for Equipment Cooling


Micron noted that its production facility ― Micron Memory Taiwan ― experienced an interruption of nitrogen gas distribution. As a result, the plant disturbance is expected to last until the first half of April.


Micron-DRAM-Memory-Tanks

Image:  OEM Nitrogen Tanks



HOW WILL THIS AFFECT THE MARKET?


HOW WILL THIS AFFECT THE MARKET?

Even though the equipment was brought back to the US and has since been fixed, Micron’s Taiwanese plant  is not expected to return to full operation until early-mid April.


[table id=190 /]

This will most likely create supply issues and lead to additional cost hikes. Not to mention, the downtime will undoubtedly usher in new problems for the already vying DRAM marketplace.

Micron-DRAM-Memory-2

Image:  DRAM memory modules


The publication, TrendForce released a report after the incident that forecasted expected contract costs of DRAM to increase by 3% in the next quarter of 2018, in comparison with the first.

The most recent price hikes follow a 5% quarterly growth to the mainstream PC DRAM, and DDR4 4GB modules last quarter as processor distribution continued to remain tight.


Micron-DRAM-Memory-ddr3

Image:  Server DRAM Chips

Demand for DRAM memory chips is at an all-time high, and costs for system memory and graphics cards have been hit the hardest due to insufficient supply.

Unfortunately, a report from DRAMexchange has summarized yet another reason why the memory chips in your graphics card may be running low in another month:

"Micron accounted for approximately 21 % of the DRAM market in Q3 2017, trailing behind only Samsung and SK Hynix - at 45.8 % and 28.7% respectively."

It was only in March of this year (2018) when a blackout at a Samsung fab jeopardized 3.5 percent of the planet's supply of NAND chips ― demonstrating the harsh repercussions that can occur when large scale fab malfunction.


Even though the equipment was brought back to the US and has since been fixed, Micron’s Taiwanese plant  is not expected to return to full operation until early-mid April.


[table id=190 /]

This will most likely create supply issues and lead to additional cost hikes. Not to mention, the downtime will undoubtedly usher in new problems for the already vying DRAM marketplace.

Micron-DRAM-Memory-2

Image:  DRAM memory modules


The publication, TrendForce released a report after the incident that forecasted expected contract costs of DRAM to increase by 3% in the next quarter of 2018, in comparison with the first.

The most recent price hikes follow a 5% quarterly growth to the mainstream PC DRAM, and DDR4 4GB modules last quarter as processor distribution continued to remain tight.


Micron-DRAM-Memory-ddr3

Image:  Server DRAM Chips

Demand for DRAM memory chips is at an all-time high, and costs for system memory and graphics cards have been hit the hardest due to insufficient supply.

Unfortunately, a report from DRAMexchange has summarized yet another reason why the memory chips in your graphics card may be running low in another month:

"Micron accounted for approximately 21 % of the DRAM market in Q3 2017, trailing behind only Samsung and SK Hynix - at 45.8 % and 28.7% respectively."

It was only in March of this year (2018) when a blackout at a Samsung fab jeopardized 3.5 percent of the planet's supply of NAND chips ― demonstrating the harsh repercussions that can occur when large scale fab malfunction.



WHY DOES THIS SOUND LIKE OLD NEWS?


WHY DOES THIS SOUND LIKE OLD NEWS?

Micron reported to have endured a similar dilemma back in July of 2017,  when an entire DRAM facility was shutdown due to a nitrogen gas equipment malfunction. The gassy mishap contaminated the wafers and equipment at the plant, and caused a production capacity reduction of approximately 60,000 wafers (out of a total of 125,000 wafer starts per month).

Micron-DRAM-Nitrogen-Example

Image:  Nitrogen Distribution Error


The cause of the current malfunction is "not exactly the same, but the malfunctioning gear is similar to the equipment that forced the shutdown in July [2017]," said Wu, a Micron representative.  

Additionally, "Micron Memory Taiwan has a wafer manufacturing capacity of about 90,000 bits, which accounts for approximately 7.8% of wafer capacity in the industry."

Micron is allegedly unable to report on the extent of their current manufacturing loss since the plant has not returned to its full operational status,  but it is expected that manufacturing will now be reduced by another 40,000 wafers.


DRAM-Memory-Fab

Image:  Micron DRAM Fab in Taiwan


Micron reported to have endured a similar dilemma back in July of 2017,  when an entire DRAM facility was shutdown due to a nitrogen gas equipment malfunction. The gassy mishap contaminated the wafers and equipment at the plant, and caused a production capacity reduction of approximately 60,000 wafers (out of a total of 125,000 wafer starts per month).

Micron-DRAM-Nitrogen-Example

Image:  Nitrogen Distribution Error


The cause of the current malfunction is "not exactly the same, but the malfunctioning gear is similar to the equipment that forced the shutdown in July [2017]," said Wu, a Micron representative.  

Additionally, "Micron Memory Taiwan has a wafer manufacturing capacity of about 90,000 bits, which accounts for approximately 7.8% of wafer capacity in the industry."

Micron is allegedly unable to report on the extent of their current manufacturing loss since the plant has not returned to its full operational status,  but it is expected that manufacturing will now be reduced by another 40,000 wafers.


DRAM-Memory-Fab

Image:  Micron DRAM Fab in Taiwan



WHAT CAN WE EXPECT?


WHAT CAN WE EXPECT?

DRAMeXchange, a branch of TrendForce, points out that most PC DRAM contracts are now quarterly prices, so the upward price movement for each quarter is going to be concentrated in the first month of every quarter.

Hence, the margin of the purchase price increase in January reflected the margin of the entire quarter. Contract costs of PC DRAM goods stayed constant throughout March, showing no noticeable changes from February.

Micron-DRAM-DDR4

Image:  DDR4 DRAM Memory



DRAMeXchange, a branch of TrendForce, points out that most PC DRAM contracts are now quarterly prices, so the upward price movement for each quarter is going to be concentrated in the first month of every quarter.

Hence, the margin of the purchase price increase in January reflected the margin of the entire quarter. Contract costs of PC DRAM goods stayed constant throughout March, showing no noticeable changes from February.

Micron-DRAM-DDR4

Image:  DDR4 DRAM Memory



INTEL INTERFERENCE?


INTEL INTERFERENCE?

It’s been noted that Intel is currently in talks with Micron about a proposed merger that could place Micron stock at roughly $70 per share in a deal that would combine stock and cash for Micron shareholders. It's believed that the boards of both companies have already approved the deal.

It was also reported that part of the unspoken reason for Intel's acquisition was that Intel was under pressure from the U.S. administration to stop its cooperation with China, particularly in regards to the memory fab it had been planning on using overseas.

Intel-Micron-Merger-Image

Image:  Intel's DRAM Headquarters


By merging with Micron, Intel is going back to its old roots ― being a memory manufacturer.

In 1974, Intel controlled over 80 percent of the DRAM market prior to losing out to overseas competitors. Intel rep, Krzanich stated "Our purpose is to get back to some rather large share of their memory market ... if at first you don't succeed, try, try again..."

In related news, Trump has called for a halt in chip equipment sales to China. The administration is using a unique combination of CFIUS and War Power Acts in a way that would block sales of innovative chip technology to China. This would certainly entice Intel to join forces with American powerhouse, Micron.

All things considered,  Micron’s latest incident will likely constrict the global memory supply that’s proved to be problematic for Buyers for quite some time now.

Likewise, additional factory constraints are projected to negatively affect the already-dire hardware market inevitably extending the length of this monumental memory shortage.


DRAM-Memory-Fab

Image:  DRAM Memory Module, Currently Experiencing A Shortage



It’s been noted that Intel is currently in talks with Micron about a proposed merger that could place Micron stock at roughly $70 per share in a deal that would combine stock and cash for Micron shareholders. It's believed that the boards of both companies have already approved the deal.

It was also reported that part of the unspoken reason for Intel's acquisition was that Intel was under pressure from the U.S. administration to stop its cooperation with China, particularly in regards to the memory fab it had been planning on using overseas.

Intel-Micron-Merger-Image

Image:  Intel's DRAM Headquarters


By merging with Micron, Intel is going back to its old roots ― being a memory manufacturer.

In 1974, Intel controlled over 80 percent of the DRAM market prior to losing out to overseas competitors. Intel rep, Krzanich stated "Our purpose is to get back to some rather large share of their memory market ... if at first you don't succeed, try, try again..."

In related news, Trump has called for a halt in chip equipment sales to China. The administration is using a unique combination of CFIUS and War Power Acts in a way that would block sales of innovative chip technology to China. This would certainly entice Intel to join forces with American powerhouse, Micron.

All things considered,  Micron’s latest incident will likely constrict the global memory supply that’s proved to be problematic for Buyers for quite some time now.

Likewise, additional factory constraints are projected to negatively affect the already-dire hardware market inevitably extending the length of this monumental memory shortage.


DRAM-Memory-Fab

Image:  DRAM Memory Module, Currently Experiencing A Shortage



HOW TO TAKE ACTION

&

MITIGATE SOURCING ISSUES:


HOW TO TAKE ACTION

&

MITIGATE SOURCING ISSUES:

We don’t see any reason to panic, however, we are seeing an influx of Micron and memory requests across the board.  

Scheduled purchase orders and large volume buys can significantly reduce your risk of line-down situations.   

If you’re currently procuring memory modules  ― especially DRAM ― we highly recommend contacting us or reaching out to your designated account manager.

Take advantage of Sensible Micro’s ability to provide quick stock checks, live pricing, datasheets or whatever else you need to get you through this shortage.

We don’t see any reason to panic, however, we are seeing an influx of Micron and memory requests across the board.  

Scheduled purchase orders and large volume buys can significantly reduce your risk of line-down situations.   

If you’re currently procuring memory modules  ― especially DRAM ― we highly recommend contacting us or reaching out to your designated account manager.

Take advantage of Sensible Micro’s ability to provide quick stock checks, live pricing, datasheets or whatever else you need to get you through this shortage.