A powerful 7.4-magnitude earthquake hit eastern Japan on March 16, prompting some companies, such as Kioxia, to halt production. The memory chip vendor has suspended part of its production lines at K1, a new 3D NAND flash fab in Kitakami of Japan's Iwate Prefecture, according to industry sources.
The event may further constrain Kioxia's output particularly the output of its 3D TLC NAND flash chips, said the sources.
Kioxia in late January saw operations at its JV fabs in Yokkaichi (Mie Prefecture) and Kitakami hit by contamination of materials used in flash chip production, but has claimed it was able to resume normal operations at the affected facilities in late February.
The contamination issue is still affecting Kioxia's shipments, nevertheless, prompting the chip vendor to allocate more of its available capacity for specific high-volume orders and leave limited availability for smaller-scale orders and orders that yield lower margins, the sources indicated.
With the earthquake disrupting production at Kioxia's Kitakami plant, the memory vendor may have to raise its prices particularly those for 3D NAND flash chips to reflect its supply constraint starting April, the sources believe.
Kioxia is expected to raise its 3D TLC NAND chip prices by at least 15%, which may soon be effective, said the sources, adding prices for its MLC NAND chips will also be adjusted upward by 5% and more.
Western Digital, Kioxia's JV partner, has already raised its quotes by about 10% to reflect its supply shortfall, according to previous reports.