Quake, Tsunami Cause Uncertainty in DRAM, Flash Production
Uncertainty surrounding the horrendous March 11 earthquake and tsunami in Japan has disrupted some aspects of the dynamic random access memory and NAND flash businesses in that stricken country.
Raymond James Equity Research wrote in a media advisory March 14 that most DRAM players have ceased "spot" price quoting activity since March 11 as a result of uncertainty regarding manufacturing-equipment damage, power disruptions and raw-wafer supply disruptions.
Japan's Shin-Etsu is a top DRAM producer. Micron, the top-producing U.S. DRAM manufacturer, is based in Idaho.
As a result of this uncertainty, DRAM spot prices were up 6 percent to 7 percent from March 11 to March 14, Raymond James said. "We suspect this dynamic to place upward pressure on DRAM contract pricing," the market researcher wrote.
"With PC OEMs already starting to worry about supply even before the quake/tsunami, the DRAM market and, of course, the NAND market, could become more volatile in the near-term before stabilization," the researcher wrote.
Micron, whose most recent DRAM price is listed at $10.24, seems likely to benefit from the current dynamic because its fabrication plants and back-end assembly/test locations are not in Japan, Raymond James said. Micron is a high-ranking supplier of both DRAM and NAND.
SanDisk, whose latest price for NAND is $45.07, appears more vulnerable because it specializes only in NAND and has the bulk of its manufacturing in Japan as part of its joint ventures with Toshiba, Raymond James said.
The researcher said that no structural damage has been reported at the joint-venture plants.