14 DAY TRIAL // After a power outage at a NAND chip production plant in South Korea that left Samsung with almost no flash production capabilities and the entire industry that depends on NAND chips in the air, the memory manufacturer reports that all lines are now fully operational. The incident at the Kiheung production plant, near Seoul, had drastic repercussions in all the NAND chip using industry as several of Samsung's competitors found themselves rising as the price of a flash chip soared.
As Samsung Electronics is the biggest memory manufacturer in the world, the incident is likely to cause a massive shortage of parts on the NAND market, at least in the first half of August, according to the market research company iSupply cited by the news site News.zdnet.com. Samsung's affected production lines were responsible for about 35 percent of the total NAND flash memories worldwide, so the manufacturing company expects a loss of $43.4 million, that is lower than the original estimates that reached $54.1 million.
Because Samsung was for years the leading flash memory manufacturer and vendor, its production drop will cause its rivals, Toshiba and Hynix, to receive a revenues boost as the demand for NAND chips will soon be higher than the production. The affected NAND chip production lines were restored to full capacity the next morning, but even so, analysts are expecting the producer to be forced to discard most of the chips that were in the production queue. "The Samsung outage comes at a critical juncture in the NAND market, when conditions are set to shift from shortage to oversupply," iSuppli said in a report dated Friday. "The major factor to watch now is how quickly Samsung actually recovers from this outage". As the market is shifting abruptly from oversupply to critical shortage, NAND manufacturers are expecting a rise in the value of their shares, but the companies that are depending on flash memory chips for their finite products are seeing a small decline; this is the case with Apple that lost some points overnight.