china fire rattles world chip supply chain
Last Updated : GMT 07:06:38
Arab Today, arab today
Arab Today, arab today

China fire rattles world chip supply chain

Arab Today, arab today

Arab Today, arab today China fire rattles world chip supply chain

Shanghai - AFP

A fire at a giant Chinese factory making almost one sixth of the world\'s supply of a key high-tech component shows how vulnerable global manufacturing chains can be to an unexpected event, analysts say. The vast SK Hynix facility in Wuxi city produces dynamic random access memory (DRAM) chips, used to store data in personal computers and mobile devices such as smartphones and tablets. The South Korean firm is the world\'s second largest manufacturer of DRAM chips, and says it has a 30 percent market share, with the factory in eastern China accounting for half its output. Foreign firms have flocked to China, the workshop of the world, to take advantage of cheap labour, good infrastructure and accommodative local governments. Economies of scale gained through massive factory complexes help lower costs, but also bring with them risks should a company rely on a limited number of plants. The scale of production now means that a fire or strike taking one factory out of action can reverberate around the world. Hynix -- whose customers include smartphone giants such as Samsung and Apple, which has just introduced two new iPhones -- has only one other facility producing DRAM chips, in South Korea. Partial production in Wuxi resumed three days after the September 4 blaze, which was reportedly caused by a gas leak, but a spokesman at the company\'s headquarters told AFP: \"It\'s still too early to give the estimate of the damage and to predict when full operations may resume.\" Analysts say such supply chain shocks can push up prices and potentially delay shipments for finished products. \"As global smartphone shipments are at a high level...supplies (of memory chips) are sought-after,\" said Wang Jun, of consultancy Analysys International. \"Hynix is in a relatively advanced position in the global memory chip market, so even a single incident at one plant will have a domino effect.\" Chip values spiked after the fire and are expected to remain buoyant, according to analysts. \"Memory chip prices surged mainly because of expectations\" of short supply, said Kevin Wang, director of China services at market research firm IHS iSuppli. \"Prices will likely remain on an upward trend towards year-end.\" A huge shortage of memory chips was unlikely in the next two months because of high inventories, he added, but the longer-term impact would depend on how soon Hynix could resume full production, which could take up to four to six months. In July Hynix posted record second quarter profits on the back of robust chip demand and strong semiconductor prices. Its operating profit for April-June jumped to 1.1 trillion won ($1.0 billion), a sharp increase from 5 billion won a year earlier. No smartphone producers are known to have announced delays yet due to the fire, but analysts said it would inevitably have some impact. \"Mobile phone producers related to Hynix will surely be affected, but shipments will gradually stabilise as other suppliers in the global supply chain will come in and fill the gap,\" said Wang Jun. Global shipments of smartphones jumped 52.3 percent annually to 237.9 million units in the second quarter this year, the strongest growth in more than a year, according to market intelligence firm International Data Corporation (IDC). IDC has forecast 40 percent annual growth in worldwide smartphone shipments to over one billion units this year. But such explosive growth assumes other suppliers can meet demand for DRAM chips to fill the gap left by the Hynix fire, analysts said.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china fire rattles world chip supply chain china fire rattles world chip supply chain

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

china fire rattles world chip supply chain china fire rattles world chip supply chain

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Japanese regulators raid Airbnb

GMT 00:44 2017 Monday ,20 November

Japanese regulators raid Airbnb
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Saudi, Bahrain target Iran

GMT 00:48 2017 Monday ,20 November

Saudi, Bahrain target Iran
Arab Today, arab today Missouri problem mirrors woes

GMT 06:46 2017 Tuesday ,21 November

Missouri problem mirrors woes
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Driverless, electric future just round

GMT 02:45 2017 Monday ,20 November

Driverless, electric future just round
Arab Today, arab today Tesla unveils its all-electric semi truck

GMT 02:59 2017 Saturday ,18 November

Tesla unveils its all-electric semi truck
Arab Today, arab today Mona Abdel Ghany increased artistic activities

GMT 12:15 2017 Friday ,17 November

Mona Abdel Ghany increased artistic activities
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 12:22 2017 Thursday ,16 November

Hanan Metawe denies apology for “Major Treason”

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 02:28 2017 Saturday ,18 November

Anti-drug operation nets 4 tonnes

GMT 01:34 2017 Friday ,17 November

Banyan Tree Phuket Takes Festive Season

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday