DRAM prices jump after Hynix manufacturing facility fire

hynix dram

DRAM supplies from Hynix's fabrication (fab) plant in Wuxi, China, aren't expected to return to normal until next year after a fire severely damaged that facility, according to a new report.

In the meantime, DRAM prices are up 35 percent since the fire, as looming supply constraints prevail and there appears to be no rush by DRAM makers to sign new contracts, according to the report from analysts at investment bank PiperJaffray.

The fire that blazed for almost two hours on September 4 damaged equipment used for making PC DRAM, which sent memory prices skyrocketing .

Hynix said it would make every effort to ramp up its Waxi-based fab operations to return to normal DRAM production by this November, a prediction PiperJaffray contested.

"While press reports have indicated that Hynix's DRAM fab in Wuxi, China could be coming back online in November following the fire, we now believe that it is likely to take much longer than expected in terms of bringing the [130,000 to 140,000] wafers a month of DRAM (50% of Hynix's installed DRAM capacity) by this time frame, given the destruction from the fire," PiperJaffray's report states.

In the meantime, Hynix said is planning to start up DRAM in its M12 fab in Korea to offset the shortfall in supply.

Hynix competitor Micron will benefit from the DRAM shortfall, a financial bonus that should show up in its quarterly report in December, PiperJaffray's report said.

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