DRAM prices likely to rise due to Inotera fabrication plant contamination

By Mark Coppock July 5, 2017

DRAM — Image used with permission by copyright holder

Building or buying a new PC has been a bit more expensive over the last several months due to a number of complicated factors. The production of solid-state disks (SSDs) has struggled to keep up with demand, the GPU market has been slammed by cryptocurrency miners buying up all of the available stock of midrange and high-end cards, and now DRAM pricing has become a sore spot, with a number of manufacturers scaling back on production for a number of different reasons. Now, a bit of bad luck promises to drive up prices even further, as DRAM maker Inotera (aka Micron Technology Taiwan) has shut down operations at its Fab-2 plant in Taiwan, as Evertiq reports.

The shutdown was prompted by contamination of equipment caused by a faulty nitrogen gas dispensing system in the facility, which led to contamination of the DRAM wafers themselves. Each wafer produces a number of individual DRAM chips, and the Fab-2 plant makes a total of about 60,000 wafer starts a month. That’s almost half of Inotera’s 125,000 monthly wafer starts and leaves the company’s other fabrication plant as its only source of DRAM fabrication capacity.

The impact on the DRAM market will be significant, as Inotera’s Fab-2 plant is responsible for roughly 5.5 percent of the industry’s total output of just over a million wafer starts for the third quarter. Until the company can clean things up and get the plant back into operation, which is likely to require some significant time to accomplish, DRAM prices can be expected to rise at least a bit. In addition, Inotera is an important producer of the LPDDR4 memory used in Apple’s iPhone, meaning that the shutdown could have a significant impact on the much-anticipated 10th anniversary iPhone that’s expected later in the year.

Overall, whether you’re building or buying a PC, a server, or a mobile device, it’s likely that you’re going to pay more. It’s unclear how long the outage will last and what the overall impact will be on DRAM pricing and availability, but anyone hoping that DRAM prices would stabilize and maybe even drop is likely to be disappointed.

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