In the context: Western Digital and Kioxia have been trying to address pollution at their manufacturing facilities in Japan over the past few weeks, resulting in the loss of more than three percent of global NAND production forecast for this year. This can lead to price spikes until production reaches full capacity.
We learned last month that Kioxia and Western Digital were forced to shut down two of their manufacturing plants after they discovered a contamination issue affecting BiCS 3D NAND lithography equipment. This resulted in the immediate loss of a staggering 6.5 exabytes of NAND chips that would otherwise be integrated into hundreds of millions of solid-state storage devices.
Two companies now say The pollution issue affecting the Yokkaichi and Kitakami factories was resolved at the end of February, but no details were provided regarding the specific pollutant that caused it all. Normal production has resumed and will ramp up slowly in the coming months.
If all goes well, both facilities should be back at full capacity by the end of June.
We now also have a clearer picture of the impact, as Western Digital said defective NAND dies total about seven exabytes, slightly more than initial estimates given in February. In addition, there is the issue of missed NAND production as the production lines have not been used for several weeks.
According to Wells Fargo semiconductor analyst Aaron Reikers, Kioxia and Western Digital are expected to register a performance loss of about 29 exabytes in the first half of 2022.
This will no doubt affect the financial results of these companies in the short term, and Western Digital has already revised its revenue forecast for the third fiscal quarter from $4.45-4.65 billion to $4.2-4.4 billion.
Kioxia and Western Digital together make up about third the NAND market, so this will also affect the prices of SSDs. According to a marketing research company Trendforcein the coming months, NAND prices could rise by 5-10 percent.