Texas Freeze Leads to Samsung Fab Shutdown and Rising Component Prices
- Price hike for multiple critical components
- Disruptions continue for SSDs
- The critical commodities made by Samsung's S2 fab
- When will Samsung's fab reopen?
Samsung's Austin foundry is to stay closed for the third straight week as the plant struggles to recover from Texas' snowmageddon. While power, water, and gas are available, the fab still needs time to restart the tools and clean the facility.
The fab was initially shut down at the request of the Austin Energy power grid, in order to conserve energy for people's homes. Shutting down a fab site is relatively easy. Yet restarting a fab site proves a much more difficult task, and the consequences are starting to show.
NAND Price Hike
Before Q1 of this year, TrendForce initially predicted NAND flash prices would decrease by up to 10% due to oversupply. Snowmageddon swiftly reversed the prediction.
As Samsung's S2 fab continues to work toward a restart, NAND prices are expected to rise. According to TrendForce, the overall NAND flash price in Q2 of 2021 is expected to increase by up to 8%.
PC notebook demand remains very high due to steady rates of remote workers and students. Add the Texas freeze on NAND component fabs to the equation, and you see why TrendForce has revised its price predictions for Q2.
SSD Disruption and Price Increase
Due to halted production, SSDs are also predicted to experience an increase in price due to undersupply. While the Samsung foundry does not produce NAND flash and only handles consignment production based on customer designs, 10% of the production volume at the Austin-based foundry is a controller used in Samsung's SSDs.
According to TrendForce, the shutdown directly affects Samsung's 128-layer NAND-based flash commodities. The lack of controllers are predicted to make SSD manufacturers extend lead times for SSD orders. Additionally, SSD prices expect to rise by up to 5% due to the shutdown.
What Else Is Produced at the Samsung Foundry in Austin?
Samsung's semiconductor S2 fab in Austin uses 14LPP and 11LPP technologies to make advanced chips on one production line. Other production lines create mature chips with 28 nm to 65 nm nodes.
In addition to Samsung's branded SSD controllers that use 14 nm to 40 nm nodes, the fab also plays a critical role in the production of automotive chips for Tesla and Renesas. Telecommunication chips for Qualcomm are also produced at the S2 fab site.
When Will Samsung's S2 Fab Reopen?
While there is no current date set for the fab to reopen, Samsung expects SSD production to restore in May.
Fab restarts always come with some hiccups. Just a tiny amount of water making its way into a tool can completely shut things down again. The tools at fabs are extremely delicate and difficult to restore after being placed in storage.
In the meantime, Qualcomm, Tesla, and Samsung LSI will look to other manufacturers to use the parts originally produced at the S2 fab in Austin. Finding crosses will be difficult, as many manufacturers may not be interested in short-term business conducted while the Austin fab is closed. Prices are also already high at other foundries and SSD supply is being further impacted by packaging issues in Taiwan.
Automakers continue to take the biggest hit and will have to continue their search for specialized chips used in their vehicles.
How Z2Data Can Help With Disruptions and Fab Shutdowns
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