Flash Memory Prices Set to Rise Due to Factory Contamination at Western Digital and Kioxia, “At Least” 6.5-Exabyte Loss

In the past few weeks, Western Digital and Kioxia have suffered from a “major factory contamination” that may cause flash memory prices to rise by as much as 25%. The two companies are estimating an average of about $1 billion worth of losses. This announcement has sent shockwaves in traditional computer storage vendors like Seagate Technology PLC, who is also affected by this mishap. How will these events affect future gaming sales?

Kioxia, a Chinese company that produces flash memory chips, has announced the acquisition of Western Digital. The deal will allow Kioxia to produce more chips, but it will also cause prices for flash memory to rise. This is because there was a factory contamination at Western Digital and over 6.5-exabyte loss due to this.

Western Digital image

Western Digital and Kioxia both sent press statements yesterday claiming that contamination had resulted in the loss of a ton of 3D NAND, with the former estimating a loss of “at least” 6.5 exabytes of flash memory. According to sources such as TrendForce, flash memory price is expected to rise as a consequence of the problem, maybe as much as 10% in Q2. Neither Western Digital nor Kioxia have provided an explanation for how the infection occurred.

According to TrendForce, NAND Flash pricing is expected to rise 5-10% in Q2 due to material contamination at WDC and Kioxia (TrendForce)

Prior to this occurrence, TrendForce predicted that the NAND Flash market will have a modest surplus throughout the year, with average prices falling from Q1 to Q2.
The effect of WDC’s material contamination problem, on the other hand, is considerable, and Samsung’s experience during the last pandemic-related lockdown of Xi’an has also slowed the size of the NAND Flash pricing drop.
As a result, the price decline in Q1 will be reduced to 510 percent. Furthermore, according to TrendForce, the combined WDC/Kioxia NAND Flash market share was as high as 32.5 percent in the third quarter of this year. The fallout from this latest incident may cause a 51% increase in NAND Flash prices in Q2.

Western Digital Provides Updates on the Joint Venture Flash Memory Manufacturing Facilities’ Production Status (Business Wire)

Western Digital Corp. stated today that contamination of a substance utilized in its manufacturing processes has occurred, disrupting output at its Yokkaichi and Kitakami joint venture flash fabrication facilities.
According to Western Digital’s current estimates, the effect will be a drop of at least 6.5 exabytes in flash availability.
The business is working closely with Kioxia, its joint venture partner, to put in place the required procedures to get the facilities back up and running as soon as feasible.

About the Yokkaichi and Kitakami factories’ operations (Kioxia)

Some activities at our Yokkaichi and Kitakami plants have been impacted since late January. The reason is thought to be an impurity-containing component used in a particular manufacturing method for the 3D flash memory “BiCS FLASH TM.”
We are now working carefully to take precautions in this process with the goal of resuming regular operations as soon as possible.
Our company’s shipments of 2D NAND flash memory are not likely to be impacted. We will continue to do all we can to minimize the negative effect on our consumers.