Editing by Greg Gao

The global tech giant Samsung announced on December 29 that it would temporarily adjust the operations of its NAND Flash memory plant in Xi'an, Northwest China, due to the week-long-now lockdown of the city hit by the latest COVID-19 outbreak. Industry experts predict that this may drive NAND prices to rise sharply.

According to Samsung, the decision was made to protect the health and safety of its employee. The company would take all necessary measures, including leveraging its global manufacturing network, to ensure that its customers are not affected by this suspended operation. 

Samsung's fab in Xi'an mainly produces NAND flash products, with a monthly production capacity of about 120,000 wafers. An additional 130,000 wafers will be fabricated monthly when the plant's second phase is put into production. Output at Samsung's Xi'an fab accounts for about 42% of Samsung's total NAND flash production capacity or around 15% of the global NAND flash output.

Samsung plans to continue its expansion in Xi'an. Its goal is to establish a 96-layer V-NAND production base in China, but the progress is delayed due to the impact of the epidemic, industry source indicated.

The recent NAND spot price has fluctuated slightly, and the decline has slowed down. The suspension of operation of Samsung's Xi'an plant could add pressure to the chip supply chain and drive NAND Flash price up. Samsung now has stopped offering its NAND flash quotes, according to the sources.