Last updated: January 12, 2022 at 07:52 GMT + 00:00
Although Samsung regularly relocates its manufacturing facilities to places like India and Vietnam, its presence in China is still not negligible. Xi’an City, in particular, is home to Samsung’s DRAM manufacturing facilities. It has been locked down for some time by the Chinese government due to the increase in cases.
Fortunately, industry analysts are speculating that Samsung will be largely unaffected by the lockdown, at least in the near term due to Samsung’s existing stocks. The factories are expected to resume full-scale operations in February. Samsung’s Xi’an factory is responsible for 40% of its NAND flash products. or 10-15% of global NAND production.
However, stopping production could trigger a rise in DRAM prices later in the year. This isn’t necessarily a bad thing for Samsung, as DRAM prices have been low due to oversupply. The shortage will help Samsung to raise prices, which in turn will generate “record” profits. Choi Do-Yeon and NamKung Hyon of Shinhan Investment Corp have stated the following on this matter.
“DRAM and NAND Chip Prices Expected to Increase in Q2 Partly Due to Increased Bargaining Power of Chipmakers”
On the other hand, everyone will certainly feel the pinch of the rising costs of DRAM. Since almost all modern electronic devices use a DRAM chip in one form or another, the increased costs associated with purchasing the components will almost certainly be passed on to end users.
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