Toshiba Memory and Western Digital on Friday disclosed that an unexpected power outage in the Yokkaichi province in Japan on June 15 affected the manufacturing facilities that are jointly operated. Right now, production facilities are partially halted and they are expected to resume operations only by mid-July.

Western Digital says that the 13-minute power outage impacted wafers that were processed, the facilities, and production equipment. The company indicates that the incident will reduce its NAND flash wafer supply in Q3 by approximately 6 EB (exabytes), which is believed to be about a half of the company’s quarterly supply of NAND. Toshiba does not disclose the impact the outage will have on its NAND wafer supply in the coming months, but confirms that the fabs are partially suspended at the moment. Keeping in mind that Toshiba generally uses more capacity of the fabs than WD, the impact on its supply could be significantly higher than 6 EB with some estimating that it could be as high as ~9 EB.

Both companies are assessing the damage at the moment, so the financial harm of the incident is unclear. Not even counting potential damage to production tools and other equipment used at the fabs, 6 EB of NAND cost a lot of money. Furthermore, analysts from TrendForce believe that a consequence of the outage will be some loss of confidence from clients of both companies, which will have a financial impact as well.

The Yokkaichi Operations campus jointly owned and run by Toshiba and Western Digital produces about 35% of the global NAND output in terms of revenue, according to TrendForce. At present, the manufacturing base has five production facilities (Fab 2, Fab 3, Fab 4, Fab 5, and Fab 6) as well as an R&D center, all of which were affected by the outage. Three fabs within the campus produce 3D NAND flash, whereas another two are used to make special-purpose types of memory.

Considering the gargantuan size of the Yokkaichi Operations, disruptions of its supply will inevitably have an effect on 2D NAND and 3D NAND spot prices in the short-term future. Nonetheless, since contract prices have already been set for Q3 (and possibly Q4), they are not going to change. Meanwhile, it remains to be seen whether large customers will have to go shopping in Q3 or Q4 and affect prices on the spot markets further.

Considering that the Yokkaichi Operations produces at least 1/3 of the global NAND flash output (let’s assume that dollar share more or less corresponds to bit share) and half of its production for the quarter was lost because of the incident, this means that the industry will miss approximately 1/6 (or 16.5%) of the global NAND supply in Q3. Whether or not this will create a deficit on the market that will cause significant price hikes depends on multiple factors and is something that remains to be seen.  

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Sources: Western Digital, Reuters, TrendForce, Blocks & Files

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  • KlfJoat - Friday, June 28, 2019 - link

    Darwin Award is for removal from the gene pool. Death is a removal, sure. But so is castration, uterine ablation, and many other things. Reply
  • jrs77 - Friday, June 28, 2019 - link

    Prices are falling... quick, let's fake an accident to cretae an artificial shortage to boost prices again.

    Seriously, this is getting old and needs to stop.
    Reply
  • zodiacfml - Saturday, June 29, 2019 - link

    exactly Reply
  • Yojimbo - Saturday, June 29, 2019 - link

    It didn't actually happen. They hired Kubrick to film the whole thing. Those 6 exabytes were purchased by the US government to run simulations on alien technology in Area 51. Reply
  • Ashinjuka - Friday, June 28, 2019 - link

    If Shinji had got Ramiel in one shot none of this would have happened.

    WE WERE COUNTING ON YOU SHINJI-KUN. 😫
    Reply
  • Eliadbu - Friday, June 28, 2019 - link

    I know it is complicated and Expensive but any manufacturing business of that sort that can lose billions of dollars from few minutes of power outage should have some sort of backup or redundancy. There should be no excuse for planning that sort of precaution ahead of time. I know it's Japan and those kind of incidents are very rare but a business like semiconductor manufacturing can not leave any thing for luck. Reply
  • Dark42 - Saturday, June 29, 2019 - link

    I'd like to buy a wafer as decoration for my room @Toshiba, how much $ is it per Wafer?
    Seriously, there could be quite some demand for this from enthusiasts.
    (And how much would be a fully functioning wafer be worth?)
    Reply
  • Eliadbu - Saturday, June 29, 2019 - link

    Depends on the manufacturing process how many layers the NAND has and some other stuff but it can cost as much as 12k usd for 300mm wafers, maybe more. Reply
  • rrinker - Monday, July 1, 2019 - link

    I actually have an uncut wafer from Dallas Semi. Not sure how the guy obtained them, but I was able to score one These are much older, smaller wafers than a modern fab works with, and the process is large enough that with a decent magnifier you can see the structure, but it's still neat. I need to frame it and build some sort of protection - they are VERY fragile. The guy was selling whole ones as well as broken, I have one of each, keep the whole one well wrapped and away from things like asshole cat who knocks everything on the floor. I'd say a old wafer like this is someone more interesting than a modern one, as you wouldn't be able to see much with the naked eye, compared to this old one. Reply
  • FunBunny2 - Saturday, June 29, 2019 - link

    just another example of why bitcoin mining happens in places with very large hydro power locally. of all the sources of dem teeny electrons screaming down the wire, them's the most reliable. Reply

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