Samsung’s DRAM division to remain largely unaffected by Xi’an lockdown

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Although Samsung is steadily relocating its manufacturing facilities to locations like India and Vietnam, it still has a not-too-insignificant presence in China. The city of Xi’an, in particular, is host to Samsung’s DRAM manufacturing facilities. It has been locked down for quite some time by the Chinese government due to rising cases.

Thankfully, industry analysts speculate that Samsung will largely remain unaffected by the lockdown, at least in the short term due to Samsung’s existing stockpile. The plants are expected to resume full-scale operations in February. Samsung’s Xi’an plant is responsible for 40% of its NAND flash products. or 10-15%of the global NAND production.

However, the lapse in production could trigger an increase in DRAM prices later in the year. That isn’t necessarily a bad thing for Samsung, as DRAM prices have been on the lower end due to oversupply. The shortage will help Samsung drive up prices, which will, in turn, generate “record-breaking” profits. Choi Do-Yeon and NamKung Hyon from Shinhan Investment Corp had the following to say about the matter.

“DRAM and NAND chip prices are forecast to rise in the second quarter due in part to chipmakers’ greater bargaining power”

On the other hand, everyone else will certainly feel the pinch of the rising DRAM costs. Given that just about every modern-day electronic appliance uses a DRAM chip in one form or the other, the increased costs associated with purchasing the components will almost certainly be offloaded to end-users.

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