Toshiba Recovering Slower Than Expected from the Power Outage, with 3Q Wafer Quotes Under Pressure to Rise in the Short Term, Says TrendForce

28 June 2019 Semiconductors TrendForce

Toshiba Memory Corp. (TMC) reported that its main NAND Flash production base in Yokkaichi, Japan, experienced a 13-minute power outage on June 15. All production facilities within the base (Fab 2, Fab 3, Fab 4, Fab 5, and Fab 6) were affected by the power outage, but we have yet to see all facilities return to normal operation as of now. An assessment by DRAMeXchange , a division of TrendForce , gives that wafer quotes will be pressured to rise in the short term due to this event, and there may be a rise in 2D NAND flash product prices and a slight shrink in price decline for 3D NAND flash products in the third quarter.

Toshiba and its joint venture partner Western Digital have made separate announcements about this event today (June 28) . Western Digital states that the power outage at Yokkaichi impacted approximately 6 exabytes (EB) of its NAND Flash wafer availability, with the effect of this incident on the market supply to be felt mainly in the third calendar quarter of this year. Toshiba's announcement, on the other hand, does not reveal how much damage was done to its NAND Flash wafer production. A fallout that Toshiba and Western Digital can expect is some loss of confidence from their downstream clients. The reliability of their production lines is now under doubt as the base is not resuming normal operation as quickly as can be reasonably expected for a leading-edge semiconductor plant.

Taking account of the latest development, TrendForce has made adjustments to its view on price trends in the NAND Flash market for 3Q19. The supply of 2D NAND Flash, which caters more toward specialty storage applications, will tighten up noticeably in the short term due to the power outage. The Yokkaichi base remains a major supply source for 2D NAND products. Furthermore, NAND Flash suppliers are now holding lower inventories of 2D NAND products than before. Hence, TrendForce now expects some impetus for suppliers to raise quotes on 2D NAND products in 3Q19.