Micron Fab Incident Disrupts DRAM Supply

　　Suspension of production at a Taiwanese DRAM fab owned by Micron Technology will further disrupt an already tight global DRAM supply situation and lead to price increases, according to a market watcher.

　　Micron (Boise, Idaho) suspended operation of Micron Technology Taiwan's Fab 2 in Taiwan's Taoyuan City July 1 due to a malfunctioning nitrogen gas dispensing system, which led to the contamination of wafers and equipment. DRAMeXchange, a market research firm which tracks memory pricing, said it estimates that Inotera suffered a production capacity loss of about 60,000 wafer starts per month.

　　DRAMeXchange estimates that the disruption will cut about 5.5 percent of the world's global DRAM capacity in July.

　　Micron Technology Taiwan was formerly known as Inotera Memories Inc. Micron acquired the outstanding stake of Inotera for $3.2 billion last year.

　　A spokesman for Micron said in an email exchange that operations at the Taoyuan site recovered quickly after the July 1 incident and that the company does not expect it to cause material impact on its business.

　　"Micron will continue to monitor the situation and provide updates to our customers and suppliers as needed," the spokesman said.

　　But DRAMeXchange said "the cleaning and the restoration of production capacity will be a time-consuming challenge." The firm said the temporary shutdown of the fab could have an impact on shipments of the forthcoming iPhone device.

　　"Both DRAM buyers and suppliers are still weighing the extent of damages caused by the contamination event at Fab-2," DRAMeChange said. "The negotiation pertaining to the third-quarter contracts are likely to be affected by some uncertainty over whether the facility can quickly resume operation."

　　The market research firm also said some suppliers are already hinting that DRAM price hikes  are on the horizon. "While the event’s long-term effect on DRAM market remains to be seen, DRAMeXchange expects tighter squeeze on the supply and strengthening of the current price upswing," the firm said.