SK Hynix in China
A fire broke out in SK Hynix’s semiconductor manufacturing plant located in Jiangsu, Wuxi, on the afternoon of September 4. The significant damage that has resulted from it is expected to jolt the global DRAM market.
The production facilities in question account for approximately 15% of the global DRAM output. As such, a shutdown of the operation could lead to a supply shortage worldwide.
According to market research firm iSuppli, Samsung Electronics took up 36.4% of the global DRAM market in the first quarter of this year, followed by SK Hynix (25.7%), Elpida (15.1%), and then Micron (14.0%). DRAMeXchange reported that the market share of Samsung Electronics was 33% in the following quarter, when SK Hynix and Micron merged with Elpida posted a share of 30% and 28%, respectively.
“The C2 Line in Wuxi, China accounts for about 50% of our DRAM production,” said SK Hynix. Given the percentage and the market share of SK Hynix, the output from the plant is estimated to be equivalent to 15% of the global total. Assuming that the plant with that much capacity is shut down, a significant undersupply is inevitable, which is likely to benefit Micron.
A collection of photos of the fire are circulating around the Internet, but at least one of the photos is not of the Hynix plant. The picture associated with many stories about the fire, a photo of a bright orange inferno engulfing a large building, is actually a picture of a fire cracker-started fire burning on the outside of the China Central Television headquarters in Beijing in 2009, as can be seen in a story about it at Xinhuanet.com.