SK Hynix Factory Fire - Not So Bad?
The tech story of the day is the huge fire that broke out at the SK Hynix factory in China at 3:50pm locat time. Orginially the speculation was that a factory fire of this maginitude would send memory prices thru the roof and cause world wide shortages similar to what happened with Hard Drives a couple years ago.
Well, it would seem that Hynix is downplaying the damage in hopes of saving themselves some investor money and claiming that the damage isn't that bad and they should be operational before too long.
From the breaking story
A massive fire on Wednesday at a factory in Wuxi, China owned by Korea’s SK Hynix could send flash memory and random-access memory (RAM) prices soaring. Hynix is the world’s second largest memory manufacturer.
Statements like that encite readers and often prompt quick action without reading the "rest"
At this stage, we don’t know how big the impact will be, but all [memory] suppliers have stopped quoting prices,” Kan says. “We will have a better update and more information in next couple of days.
Source: http://www.techcentral.co.za/hynix-fire-could-send-memory-prices-soaring/43418/
Bloomberg is being optimistic and reading from the official reports
There was one minor injury from yesterday’s blaze and no major damage to production equipment, Icheon, South Korea-based SK Hynix said in an e-mailed statement. The company said it’s still investigating the cause of the fire.
“Currently, there is no material damage to the fab equipment in the clean room, thus we expect to resume operations in a short time period so that overall production and supply volume would not be materially affected,” SK Hynix said. The majority of the cost of the damage will be covered by insurance, it said.
Source: http://www.bloomberg.com/news/2013-09-04/sk-hynix-shuts-china-computer-memory-chip-factory-after-fire.html
Meanwhile Micron is enjoying a good jump in stock price over the Hynix speculation which may end up working out in their favor.
The reason is a plant fire at one of its major competitors.
When the stock market closed for the day, Micron stock was up 5.28 percent to end the day at $14.57.
That's because Hynix, one of Micron's two competitors, had a fire at one of its production facilities in China.
That fire then caused a lot of concern that upwards of 15 percent of the world's chip production would stop, sending all eyes on Micron and Samsung, the other player in this market.
Source: http://www.ktvb.com/news/Micron-stock-jumps-after-fire-at-competitors-plant-222404311.html
On a positive note, there are major memory makers still operational and these companies have plants all over the world. The chance that we'll have a memory shortage is pretty slim.
