Friday, July 5th 2019
Japan and South Korea Disagreements Could Compromise Global Memory Supply
According to Nikkei, the newly established trade limitations between Japan and South Korea, could end up compromising global memory supply by simply restricting chemicals export. As the report says, Japan has limited its export of three vital chemicals (like orthophosphoric, hydrobromic and citric acid) used in semiconductor manufacturing, to South Korea.
Unlike before, a company that exports a chemical, now has to ask for a permission from the Japanese government, so it could supply the semiconductor foundries in South Korea. The end result of such move could be severely damaged global memory supply, as over 70% of DRAM and over 50% of NAND memory is manufactured in South Korea. Government processing of applications for exporting chemicals is estimated to take about three months, while the memory makers usually only hold around one of two months of extra supply for manufacturing. SK Hynix, a third biggest memory manufacturer by revenue, said that if it doesn't get enough stock of materials, it would have to halt production. Samsung is asserting the situation for now, without any elaboration on that. These events could lead to increased memory price and overall less supply.
Source:
Nikkei
Unlike before, a company that exports a chemical, now has to ask for a permission from the Japanese government, so it could supply the semiconductor foundries in South Korea. The end result of such move could be severely damaged global memory supply, as over 70% of DRAM and over 50% of NAND memory is manufactured in South Korea. Government processing of applications for exporting chemicals is estimated to take about three months, while the memory makers usually only hold around one of two months of extra supply for manufacturing. SK Hynix, a third biggest memory manufacturer by revenue, said that if it doesn't get enough stock of materials, it would have to halt production. Samsung is asserting the situation for now, without any elaboration on that. These events could lead to increased memory price and overall less supply.
38 Comments on Japan and South Korea Disagreements Could Compromise Global Memory Supply
Time will tell what is really at play here. Until then, I'm quite happy to believe whatever I choose, based upon history, knowledge and common sense. I'm also quite happy to come here and apologise if I got it wrong.
Its just so easy (too easy) to simply pull the conspiracy price fixing card all the time, and I would suggest its better to keep your eyes open and ready to make the distinction.
Blown
I had already redacted my comment to keep this on track though :P
We usually have laws in the EU which are know for 2 years before they are set into effect. And when they are set into effect everybody cries out, that they came so suddenly. Like the new emissions test law for car or the GDPR laws.
And if you take a look at Huawai, the only thing the US embargo achieved in the long run is that Huawai will produce and license everything in China. So US companies can't sell them their goods any longer.
In the current wold clima who knows what some political groups think to put such laws in effect. The companies will deal with it, even if it takes some time. Because if they can't sell anything, they won't make money. I've even read that the companies will the the production lines run, even if they have to sell under price. Because they don't have to pay as much as if they would stop the production.
And then oil rigs explode thanks to it. Yeehaw. USA, USA, USA!
Can we try to stay on topic?