2 min

The lockdown in Xian is affecting memory chip manufacturing facilities hampering global supply

Samsung and Micron are the largest manufacturers of memory chips in the world. They supply memory chips worldwide, but with the recent rise of Covid-19, there is a chance that the Chinese city of Xian might be under lockdown. Due to this, the two giants have announced that there might be a delay in production due to the disruption of manufacturing bases.

Furthermore, due to the lockdown, supply chains will drastically be affected. This will affect the finished products supplied to the world and the procurement of raw materials to manufacture the chips.

Impact of the pandemic

There were stringent restrictions that went into effect earlier this month due to the risk of the pandemic. These restrictions are thinning out resources for manufacturers. Micron and Samsung are adjusting to the restrictions to keep the production seamless. For the time being, Samsung’s facility is operating as usual.

Experts believe that although the facility has sufficient raw material and resources to keep production going, it is only a matter of time till they start struggling to produce the memory chips. Therefore, it is paramount that this pandemic is controlled to avoid insufficient supply.

How is this going to affect Samsung and Micron?

For now, Samsung has sufficient stock and enough raw material to meet the gap in the short run. Additionally, chips manufactured in the Samsung Xian facility are primarily supplied within China. This eliminates the bottlenecks of overseas supply. That being said, if the lockdown is prolonged, Samsung may run into complications.

As for Micron, they have already announced a delay in the production of their DRAM. They are focusing on minimizing virus transmission by taking the appropriate measures in the workplace.

The prolonged effect of the lockdown can be detrimental for both Samsung and Micron, making it vital to get the pandemic under control before it gets out of hand and impacts global supply chains.