The state of emergency at Western Digital and Kioxia factories

The state of emergency at Western Digital and Kioxia factories will drive up flash memory and SSD prices

It was reported this morning that Western Digital and Kioxia will miss significant amounts of flash memory from the market in late January due to process chemical contamination. This will inevitably lead to an increase in the price of NAND chips and products based on them – industry analysts have provided an updated forecast, which calls for a price increase of 5-10% in the second quarter of this year.

western digital

western digital

The incident affected two Japanese flash memory manufacturing factories owned by Western Digital and Kioxia, in Yokkaichi and Kitakami. The contamination of raw materials meant that significant amounts of finished products had to be written off and the production cycle had to be stopped. Taking into account the fact that the technological process of manufacturing modern three-dimensional flash memory takes two to three months, the incident will lead to short shipments of at least 6.5 Ebytes (6.5 million TB) of flash memory, Western Digital shared such data With . And apparently we are talking about a lower estimate, since the companies have not yet presented a plan for restarting the equipment and have not shared any information about possible damage.

According to TrendForce analysts, 6.5 EB represents about 13% of the total flash memory volume Western Digital and Kioxia planned to bring to market in Q1 2022, or about 3% of the total global flash memory production per year.

Before the incident, TrendForce predicted that the flash memory market would be slightly oversupplied throughout the year, with the average price of NAND chips steadily declining. However, analysts have now revised their forecast. It is assumed that in the first quarter, when the NAND memory shortage will not be fully felt due to inventory, chip prices will still have time to fall by 5-10% (previously forecast a price fall of 8-13% ). However, in the second quarter, a shortage will hit the market, which will lead to a price increase of flash memory by 5-10%, while a price drop of about the same magnitude was expected before the incident.

The combined market share of Western Digital and Kioxia in the NAND market is 32.5%. Most of the flash memory supplied by these companies is used in SSD and eMMC drives. Western Digital’s share of the SSD market is 14.1%, Kioxia – 8.4%. However, the memory of these firms is also bought by a large number of second or third tier manufacturers. Therefore, it is predicted that the undersupply and rising prices for flash memory will lead to a noticeable increase in the price of consumer SSDs in the short term.


About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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